Production in a number of local chemical, textile and glassware factories is facing setbacks for delays in the shipment of soda ash by Indian exporters over the past four months.
Soda ash, also known as sodium carbonate, is a highly soluble substance used for numerous chemical reactions. It is mostly used as an ingredient in the manufacture of dyes and colouring agents, synthetic detergents, fertilisers, glass and gum.
Bangladesh does not produce this chemical and its annual demand for 3 lakh tonnes is met through imports. Although one source is China, over 70 per cent comes from India mainly because of a shorter lead time and lower prices, said importers.
The Daily Star received complaints over the matter from a number of factory owners.
Indian exporters are delaying shipping over 50,000 tonnes of soda ash for which letters of credit (LCs) were signed four or five months back at a rate of $210 to $220 per tonne, alleged local consumers, millers, importers and traders.
When explanations are sought over the delays, the exporters are citing excuses of price hikes in international markets, including of freight charge
However, those being bought at rates ranging from $320 to $340 per tonne are being promptly shipped.
The LCs had freight cost set at $30 per tonne but now the Indian exporters are demanding $60 per tonne, citing high demand for a scarcity of ships, said importer Partho Roy.
Small importers are mostly facing troubles as the Indian exporters are mainly focusing on timely delivery of big consignments, he said.
Production in the local mills and factories are being been affected, said an importer and a manager of a chemical company asking not to be named.
"We face high risk of losing business if there are any unforeseen delays or price hikes of washing items," he said.
"Many of the factories have already halved their production because of a lower supply of the washing items. Our buyers are putting pressure on us for timely delivery of goods," he said.
"Production in my factory declined drastically almost to half because of a shortage of supply of soda ash," said another anonymity-seeking senior manager of a glass factory which consumes 20,000 tonnes of soda ash a year.
"I used to produce 300 tonnes of glassware in a day but now I produce almost 150 tonnes a day because I do not have an adequate supply of soda ash," he said.
It is also not possible to get the raw materials on a short notice because it may take over three months if LCs are opened to import the same goods from China even at higher prices, he said.
Abdullah Al Mamun, vice-president of Bangladesh Textile Mills Association (BTMA) said prices of almost all chemical and raw materials had increased in the fallouts of the Covid-19 pandemic and subsequent rise in freight charges.
Many importers, traders and mill users shifted to India from China to enjoy lower prices and a shorter lead time, leading to an overbooking of Indian suppliers, he said.
So Indian suppliers are facing trouble in ensuring the supply, Mamun also said.
He said since it was a basic raw material for washing items, Indian suppliers should focus on timely deliveries for continuation of smooth production in the local mills and factories.
Abdul Matlub Ahmad, president of the India-Bangladesh Chamber of Commerce and Industry, said to have received no complaints regarding the matter.
The chamber will look into the matter to find a solution because soda ash is a very important item for Bangladesh, he said.
He, however, added that prices of all imports from India such as steel, iron and chemicals have increased because of a disruption in production due to a severe crisis in the neighbouring country stemming from the Covid-19 pandemic.