Bangladeshi spinners demand introduction of warehousing facility for cotton trade to reduce lead-time and ensure the timely sourcing of the fibre. Under the facility, merchants from different countries will store cotton at Chittagong port warehouses to sell out their cotton to the local cotton importers and spinners. The merchants can also re-export the cotton from the port to other destinations. The system is already in use by the Chinese government, which is the largest importer of cotton. Such warehouses will allow spinners to buy cotton at their doorstep and negate the huge risks that come with the long shipment times from origin, said Monowarul Hoque, managing director of Ashik Composite Textile Mills, a cotton importer and spinner.
For local spinners, the time lag between an actual purchase and collection varies from two weeks to 12 weeks, excluding the shipment delays. It takes two weeks to get cotton from India and Pakistan and up to 12 weeks from the US, and the West African and Latin American countries, excluding the shipment delays. This lag exposes the spinners to huge market volatility, as cotton prices tend to fluctuate drastically, the local spinners do not have the means to hedge such risks without the access to futures markets.