Buyers cut RMG price by 7pc in last few years
Experts on Thursday observed that the prices of apparel products decreased significantly on the international market in last couple of years as the global buyers controlled the market and mounted pressure on suppliers to lower the prices.
They suggested that the governments of the supplier countries should break the monopsony power of the global buyers as the power instigated unfair competition among the suppliers.
They also urged the US government to play a role in raising the prices of the Bangladeshi apparel products in its market.
Their observation and suggestion came at the launch of a study ‘prices and development in the global apparel industry: Bangladesh in comparative perspective’ conducted by Mark Anner, an associate professor at Pennsylvania State University.
The Bangladesh Garment Manufacturers and Exporters Association launched the study report at its office in the city.
In the research paper, Mark said the prices of apparel declined on the global market due to monopsony power of the global buyers.
He said that the prices of RMG decreased by more than seven per cent in the world market in last couple of years.
Mark said, ‘Monopsony helps big buyers to put pressure to reduce the prices of products.’
In the research he showed that the prices of Bangladeshi cotton trouser in the US market decreased by 40.89 per cent in last 14 years.
Bangladesh is the number one exporter of the cotton trouser to the US market. China is the second largest exporter of the item while Mexico is the third.
According to the research by Mark, the prices of apparels also declined below the level required to ensure worker rights.
He said the buyers were getting benefits of the decreased prices of apparel products not the consumers.
Saying that continuous fall in the prices of products has put pressure on the suppliers and exporting countries, Mark suggested that suppliers should reach a consensus on price per unit.
Bangladesh Institute of Development Studies senior research fellow Nazneen Ahmed said that it would not possible to reach a consensus among the suppliers as competing countries would try to garb more market share.
Bangladesh government has nothing to do in this case but the US government has some role to pay in lifting the prices of apparel products, she said.
Nazneen said that the bargain power of exporting countries was very low as the number of suppliers was much higher than that of buyers.
‘The US government has a role to play in raising prices of the Bangladeshi RMG products as the buyers are offering lower prices to the manufacturers and selling the products at higher prices to the consumers,’ she said.
Khondaker Golam Moazzem, additional research director of the Centre for Policy Dialogue, said once the Trans-Pacific Partnership Agreement between US and Vietnam is signed, Bangladesh would have to face tough competition as 10 products of Bangladesh matched with that of Vietnam.
He urged the US not to change the rules of origin saying that if the US changes its rules of origins following the TPPA, Bangladesh would be affected.
Policy Research Institute executive director Ahsan H Mansur, BGMEA president Md Atiqul Islam, former BGMEA president Shafiul Islam and vice-presidents Shahidullah Azim and Reaz-Bin-Mahmood were present, among others, in the programme.
Source: New Age
