COVID re-advent in Europe, production cost rise hit Bangla RMG sector

26 Nov '21

2 min read

Pic: Vladimir Bondarenco | Dreamstime.com

The re-emergence of COVID-19 in Europe and the rise in fuel and raw material costs are affecting the recovery efforts of the Bangladesh readymade garments (RMG) sector. While RMG export orders have increased along with prices, the latter are not yet in sync with production costs, according to the Bangladesh Garments Manufacturers and Exporters Association (BGMEA).

Urging the government to pay attention to the matter, BGMEA president Faruque Hassan said the recent 23 per cent rise in fuel prices, including the increase in raw material prices, is going to increase production cost by 4-5 per cent.

A high-level BGMEA delegation recently toured Europe, including the United Kingdom.

Hassan said in the last one year, yarn prices have increased by 60 per cent, container fares by 350 per cent to 500 per cent, dye and chemical costs by 40 per cent, wages by 7.5 per cent, electricity by 13 per cent, while gas price has also gone up, according to a report in a Bangladesh newspaper.

BGMEA now fears that the hiked fuel prices will lead to an increase of around 5 per cent in cost of production and that will not reflect in product prices.

Hassan urged exporters not to negotiate orders below the production cost in any case. At the same time, he urged foreign buyers to be more sensitive about the price of the product, adding that the price should be determined keeping in mind the increase in all kinds of expenses.

Fibre2Fashion News Desk (DS)

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