Home Apparel RMG earnings hit hard by price fall in global market

RMG earnings hit hard by price fall in global market

The Ready Made Garment (RMG) sector has failed to sell their products due particularly to devaluation of prices in the international market especially in the European Union (EU) and reduction in orders from foreign buyers.Experts pointed out that the situation is a great concern for the gradual development of the country and it will hamper the macro-economic stability of the country.The stakeholders will have to produce quality products to compete in the global market. Currently, the country’s RMG products global share is 6.4 per cent while China’s market share stands at 39.3 per cent topping the list.In fact, there are threats for Bangladesh as its competitors like Vietnam and India are getting more share and posting better growth in export earnings.RMG sector has failed to achieve the export target repeatedly as they failed to compete with the rival countries. Now, the buyers are showing their keen interest to give their orders to the rival countries of Bangladesh.Taking to the Daily Observer, Abdus Salam Murshedy President of Exporters Association of Bangladesh (EAB) said EU is one of the major export destinations for exporting the RMG products.After Brexit, the UK has suddenly reduced the price of RMG products, which is affecting the total export earnings of the country, the EAB President said.Following the price reduction in UK, the other EU countries also reduced the price of the RMG products, he said. Competing countries like China, Indonesia, Vietnam and Pakistan have already adopted the lower prices of the EU and UK as the governments of these countries have provided various incentives for exporting the RMG products.”It is very tough for us to adopt the lower price of EU because our government is not providing the same facilities for us, as a result, the export target has declined during this period,” Murshedy said.Actually, the prices in the international market have declined since long, he said adding that the government of the competitor countries reduced the price of the oil but our government did not reduce the oil price.Meanwhile, the production cost of the RMG sector increased by 17 per cent over the last three years, he said. The interest on the long-term loans is still high which is increasing the production cost of the RMG products, he said. The government has set the export target at US$50 billion by 2021, he said. “To achieve this target, obviously, the government should change its policy like the competitor countries”, said the EAB President.


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