An official says the commerce ministry is less likely to reconsider the rates fixed in December
Around a week after readjustment, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has requested the commerce ministry to raise further the wastage ratio for goods made from yarn and fabrics.
Proposing the wastage ratio for sweaters and socks up to 16% from the existing 4%, the association said if the ratio is not fixed “logically”, annual sweater export worth $4-5 billion will be in trouble ultimately resulting in many factories at stake and workers unemployed.
Wastage ratio means the permissible amount of wastage in the case of goods made from yarn and fabrics. The ratio remained the same at 16% since 1998 until the commerce ministry revised it on 19 December this year.
Apparel makers say the ratio of wastage of fabrics increased because of a rise in the production of complex and fashionable items.
According to the new ratio set by the ministry, permissible wastage for basic knitwear such as T-shirts, polo shirts, trousers, shorts, skirts, and pajamas is 27%, while it is 30% for special items such as rompers, tank tops, dresses, gowns, hoodies, and lingerie.
For sweaters, jumpers, pullovers, cardigans, vests, socks, and gloves, the ratio has been readjusted to 4%.
Just after the ministry’s notification on readjusted rates, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) requested the commerce ministry to revisit it. BKMEA proposed a wastage ratio to be at 30%, 35%, and 12% respectively for knitwear, special items, and sweaters and socks.
Though the knitwear exporters demanded the sweater wastage ratio rearranged at 12%, BGMEA in its letter to the ministry sought it at 16%.
BGMEA says the 4% wastage rate for sweaters and socks is “completely unacceptable”.
A commerce ministry official told The Business Standard that there is no cutting waste in making sweaters and socks as those are made by knitting yarn. The items log nominal wastage only in dyeing and washing. So, 4% wastage is quite reasonable.
The official said there is no scope for reconsidering the rates now as sought by the BGMEA and BKMEA.
Bangladesh exported sweaters worth around $4 billion last year.
