Home ›› 25 Dec 2021 ›› Editorial
The Bangladeshi RMG sector has bounced back admirably after the lean period the industry witnessed during the height of the Covid-19 pandemic. The sector was one of the most seriously affected ones during the worst days of the pandemic period. Certain observers felt that it would take a long time for the sector to revive. However, proving them wrong the RMG sector is experiencing a sharp rise exports due to increased global demand. What is more heartening is the fact that the Bangladeshi RMG exporters are getting a fairer deal for their products. According to a report published in this newspaper on Friday, prices of apparel goods exported to the USA rose by 3.3 per cent during July-October of Fiscal Year 2021-22, compared to the same period previous year. Under the same parameters, prices of clothing items increased by 0.9 per cent in the European Union as well.
Currently the US and the EU member countries are opting for alternative sources to fulfill their demand for apparels as there are supply chain disruptions in China, closure of factories in Vietnam and political unrest in Myanmar. Bangladesh can and is taking advantage of the situation. The Bangladeshi exporters are now in a position to bargain. The report stated that local apparel exporters have taken a strong stance on getting fair prices from the US buyers, as they currently have enough work orders from the European ones. European buyers have been practicing minimum fair prices for a long time, and Bangladesh is enjoying duty-free exports under the GSP facility in that market, as stated in the report. The report quoted Bangladesh Garment Manufacturers and Exporters Association’s (BGMEA) Vice-President Shahidullah Azim as saying, “It is a good sign that we are performing well in the US market, and they are beginning to practice fair prices.”
The ready-made garment (RMG) industry is a mainstay of the economic success story that Bangladesh is. There is no doubt that Bangladesh will need to eventually diversify its export products. Yet, the fact remains that RMG is likely to continue to be our most vital sector for a long time.
Notwithstanding the threat posed by the Omicron variant of the Coronavirus, the world is returning to normalcy and the demand for apparels is likely to increase further. Whether Bangladesh can face the challenges of the expanding market will depend on several factors, at the forefront of which is the need for more skilled workers. Shortage of skilled workers has been a perennial cause for concern in the Bangladesh RMG sector. The labour productivity is quite low compared to countries competing with Bangladesh. Each garment worker accounts for USD 7,000 in export in Vietnam, the figure is closer to USD 5,300 in Bangladesh, some 30 percent lower. Obviously, a better trained workforce will allow the industry to compete at high end market levels and significantly enhance overall industry efficiency.
Many industry insiders are of the opinion that now is the perfect time to ask for even better price from the importers. Bangladesh has the highest number of green factories in the world and an increased focus on safety of operations. The customer that the RMG manufacturer is supplying to is a business partner. There should be no compunction for the manufacturer in explaining the full cost of the product they are in negotiation about and, furthermore, no harm in rejecting a price offer that is untenable for the manufacturers. We must ensure that key players in business negotiations have the necessary negotiation skills to secure the best possible price for the products Bangladesh produce. Also, Bangladeshi RMG sector is looking for non-traditional avenues for export.
In order get fairer prices for RMG products the country needs to work on its brand image as well. Experts believe that we have to move away from just being suppliers to the branded retailers and focus on establishing our fashion industry as a brand in itself.
