Monopsony power has apparently emerged as a major setback for the apparel makers of the country in getting hiked price of garment items against the increased cost of production.
It was referred at a study dubbed ‘Prices and Development in the Global Apparel Industry: Bangladesh in Comparative Perspective’ revealed formally at the conference room of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) building in the capital on Thursday.
A team of expert, led by Mark Anner, Associate Professor of Penn State University, USA, has conducted the study. Monopsony is a market where one buyer faces many sellers.
Analysts, however, called upon the government of retailers’ countries and apparel consumers to take steps to break such Monopsony power to help the garment makers to cope with the market competitiveness. The study mentioned that though the cost of production has increased, prices of apparel items have gone down steeply in the US market. Prices of cotton trousers, for instance, went down by 40.89 percent in US market during the timeline of 2000 to 2014, the study said.
Amount of revenue needed to pay the US government increased sharply during the period of January 2006 to January 2015, while the profit of retailers did not see such surge, it said.
Chaired by Atiqul Islam, President of BGMEA, the event was addressed, among others, by Md Shafiul Islam, First Vice-President of the Federation of Bangladesh Chambers of Commerce and Industry and former President of BGMEA, Dr Ahsan H Mansur, Executive Director of Policy Research Institute of Bangladesh, Dr Khandakar Golam Moazzem, Additional Research Director of Centre for Policy Dialogue, Dr Nazneen Ahmed, Senior Research Fellow of Bangladesh Institute of Development Studies, and BGMEA office bearers.
The US government can play a significant role in breaking the Monopsony power resulting in helping the apparel makers of Bangladesh to cope with the international market, said Dr Nazneen Ahmed. Calling upon the government to reduce source tax in the next budget, BGMEA President Atiqul Islam said the garment industry is under many threats, including hike of cost of production, factory remediation and currency devaluation.
