The cost of production of apparel may rise by 5 to 7 percent due to hike in fuel prices and transportation fares, said Bangladesh Garment Manufacturers and Exporters Association, the apex trade body of the clothing exporters.
The government on Wednesday increased diesel and kerosene prices by Tk 15 per litre, inviting transport operators to call for a strike nationwide and eventually hiking transport fare by 27 percent.
Because of the higher diesel price, expenses to run boilers, captive power, transport and container costs will go up, too, and will be added to the current production cost. As a result, the cost of production will increase by 5 to 7 percent, said the insiders.
Meanwhile, as prices of yarn spiraled in the international market, the garment manufacturers have negotiated with their international buyers and secured a 10 to 12 percent rise in apparel prices. “We can’t go to them and ask for another price hike,” said a BGMEA member.
The organization is claiming to have lost Tk 3,000 crore in operating revenue in the last three-day transportation strike.
“We have already lost Tk 3,000 crore during the 3-day transport strike. And, we will have to count 5 to 7 percent additional production cost for increasing fuel prices and transport cost,” said Shahidullah Azim, Senior Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Meanwhile, the yarn manufacturers are going to raise yarn prices from December. All imported clothing accessories will become dearer due to transport and port costs.
If the price hike chain reaction goes on, the largest export sector will lose its credibility to the foreign buyers, Azim said.
“Earlier, we got a price raise from our buyers and now we cannot ask for any more price hike. And, the additional cost will be a burden on the manufacturers,” said Proprietor of AAA TRIMS WORLD, Zainul Abedin.
Bangladesh Inland Container Depots Association also believes that export prices will be affected due to fuel price hike and increased transport cost.
“Because of the transport fare hike, our export cost will go up too,” said Md. Ruhul Amin Sikder (Biplob), Secretary to BICD.
The readymade garment sector is fetching the lion’s share of the total export revenue of the country. In the July-October, the sector snatched $3.56 billion out of $4.72billion (total export of the country) with 53 percent growth, according to the Export Promotion Bureau.
