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Fuel price hike will restrict Bangladesh RMG export growth
10 Jan '13
1 min read
The recent increase in prices of fuel will act as a constraint in achieving expected growth in earnings from readymade garment (RMG) exports, according to industry analysts.
A fortnight ago, Bangladesh Government raised the price of diesel by Tk 7 a litre, and that of petrol by Tk 5 a litre to reduce subsidy burden.
This increase in prices of diesel and kerosene will add some extra burden to the cost of production of apparel enterprises, which are already facing problems of inadequate gas and power supplies and high interest rates, according to experts.
Frequent power cuts have forced some of the garment manufacturing units in Bangladesh to shift to using oil-based power generators. Hence, the hike in fuel prices would add an extra burden on those enterprises, they add.
Bangladesh apparel sector fetched around US$ 19 billion in foreign exchange during fiscal 2011-12 and the Government has set a target of US$ 22 billion for the current fiscal.
The clothing sector in Bangladesh employs about 3.5 million workers, with about 80 percent of them being women.
Fibre2fashion News Desk - India
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