The US apparel buyers are still dominating in fixing prices of garment items, which are declining in their market since 2000, said a US researcher in his paper, presented on Thursday.
Associate Professor Mark Anner attributed the ‘monopsony’ of the big buyers for the declining price trend of apparel products.
‘Monopsony’ is a market condition similar to monopoly, except that a large buyer not seller controls a major proportion of the market, and drives the prices down. It is sometimes referred to as buyer’s monopoly.
Mr Anner of Penn State University of US said these while presenting his research paper – “Prices and Development in the Global Apparel Industry: Bangladesh in Comparative Perspective” – at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) headquarters in the city.
He said Bangladesh became the largest exporter of men and boys cotton trousers to the US in 2014, superseding China and Mexico.
But the price of per square meter of Bangladeshi products declined by 40.89 per cent since 2000 to 2014. The price of per square meter of cotton trouser was more than $4.0 in 2000 which stood at $2.5 in 2014, he added.
He, however, did not go through the details of the same of China and Mexico.
The paper also showed that Bangladeshi products are facing stiff competition with those of Vietnam, with a 12.36 per cent share in the US market, which was only 0.19 per cent in 2000.
China is the largest exporter to the US with 36.07 per cent market share, while Bangladesh 7.67 per cent from 6.03 per cent in 2000.
Mr Anner also suggested sharing information, creating awareness and the government’s initiatives to break the ‘monopsony’ as well as coordination among the weaker actors to address the ‘power imbalance’ in supply chain.
He, however, did not mention who will take the lead role – the supplier side or the buyer side. Executive Director of Policy Research Institute (PRI) Ahsan H Mansur said RMG prices declined for various reasons, including fall in raw material prices as well as technological advancement.
He rather recommended following the Chinese strategy of enhancing productivity and manufacturing high value added products to increase Bangladesh’s market share in the US.
BGMEA President Md Atiqul Islam said at present Bangladesh’s RMG sector is facing a very critical time.
“Cost of production has gone up by 10 per cent in recent times due to wage hike and ongoing safety initiatives by the western retailers and the government,” he added.
Additional Research Director of Center for Policy Dialogue (CPD) Khondaker Golam Moazzem said the US is going to sign TPP with 12 countries, including Vietnam, and so, the US government should safeguard other exporting countries.
“If TPP is signed between Vietnam and the US, Bangladesh will be affected. Both Bangladesh and Vietnam export the same top 10 products to US.” He stressed on ethical profit, so that suppliers can ensure compliance requirements. Senior Research Fellow of Bangladesh Institute of Development Studies (BIDS) Nazneen Ahmed recommended that the US government should take some steps in fixing price slabs.
