Home ›› 26 Dec 2022 ›› Front
Bangladesh, the second biggest apparel supplier to the European Union (EU), receives the second lowest prices after Pakistan for the goods from the block.
In January-September 2022, the EU paid Bangladesh $17.08 for per kilogramme (kg) of clothes on average, compared to a global average of $22.41, according to Eurostat, the Directorate-General of the European Commission.
According to local industry insiders, incompetence in bargaining, high-dependency on the Western market, and cheap labour cost are the main reasons for Bangladeshi apparels not getting better prices. They also blamed a lack of ethics on the EU’s part.
“It is a matter of the buyers’ mentality. They always tell us about ethics, but they pay us 15-20 per cent lower for the same products they are also sourcing from Vietnam,” said Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
Bangladesh sees 42.21% export growth
Data released by the Eurostat shows that Bangladesh exported $17.55 billion worth of apparel goods to the EU in the first nine months of this year, a huge jump of 42.21 per cent compared to the same period last year.
Industry insiders credited the growth to the apparel sector’s improvement in research and development (R&D), and access to the non-traditional markets, which is slowly upping the price of Bangladeshi clothes.
BKMEA Mohammad Hatem said, “To ensure fair prices and reduce western dependency, we are focusing on the non-traditional markets. Besides, we are working to fix a minimum price ceiling.”
According to Eurostat, the EU imported a total of $77.77 billion worth of apparel products in the January-September period of this year, a jump of 25.87 per cent compared to the same period last year.
China, the largest apparel manufacturer and exporter in the world, supplied the most clothes to the European block.
The country exported $22.59 billion worth of readymade garment to the EU during the period, posting a 25.19 per cent year-on-year growth.
Besides, Turkey’s apparel export to EU during the period saw a 14.86 per cent growth with $9.19 billion worth of products supplied, India saw 25.85 per cent growth with $3.95 billion worth of goods supplied, and Vietnam saw a 29.65 per cent growth with $3.28 billion worth of apparels supplied.
In addition, Cambodia supplied $2.81 billion worth of garment products to the EU during the period, posting a 41.08 per cent growth, and Pakistan supplied $2.93 billion worth of products, resulting in a 30.76 per cent growth.
Low price
In the meantime, the EU paid an average of $30.43 for per kg clothes to Vietnam, $25.52 to Turkey, $23.29 to China, $23.26 to India, $22.04 to Cambodia, $17.08 to Bangladesh, and $14.06 to Pakistan, according to the Eurostat.
Explaining the reasons behind the low price paid to Bangladesh by the EU, Fakir Fashion Managing Director Fakir Kamruzzaman Nahid said, “Our price bargaining capacity is not up to the international standard. Also, we expand our businesses without doing proper assessments. And our export is almost completely dependent on the Western markets.”
The cheap labour cost in Bangladesh is also another reason for apparel makers not getting the right prices, as buyers are taking advantage of the situation.
He said,“We need a big volume of workers to meet our huge demand capacity. But the Western buyers are taking advantage of the situation.
“We will get a better price for our goods, if we can create strong markets outside of the EU.”
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan said, “It is true that we are getting lower prices than our competitors, but the situation is improving. We have asked our members to not receive any order below the breakeven price.”
