79% RMG buyers yet to increase product prices, after RMG wage hike: Survey

adv-06

Desk Report: According to a survey, after RMG buyers committed to adjusting prices after the workers’ minimum wage was increased, 79.1% of readymade garment manufacturers said that buyers have not done so yet.

Figure: Faisal Samad, Panel Leader, Forum, BGMEA & Managing Director Savartex group

The findings came from a survey titled, “Garment Industries’ Crucible: Our Views”, where 66 RMG makers were interviewed.

Forum, a panel of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), conducted the survey, and Forum panel leader Faisal Samad, also a director of BGMEA, presented the survey to the media in the capital on Tuesday.

The survey also stated that 4.5% of buyers increased the product price by 1%, 6% of buyers increased by 2%, 3% of buyers increased by 3%, and 4.5% of buyers increased the product price by 4%.

In 2023, 32.8% of apparel manufacturers said that their customs and bond expense increased by 26%-50% year-on-year where 26.6% of RMG makers said that their customs and bond cost rose by up to 25%, 20.3% said the cost hike by 51%-75%, 6.3% said the cost up by 76%-100% and 11.8% blamed that their cost jump by over 100% year-on-year, the survey read.

The survey shows that in the last year, an average of 3.9% Free On Board (FoB) price declined year-on-year amid the severe high inflation, and 47.1% of manufacturers said that buyers reduced FoB price by over 5%year-on-year.

Meanwhile, the survey found that only 19.1% of factories were able to manage hundred percent orders for the next four months, while 42.6% claimed that they had less than 50% orders during the period compared to their capacity.

Faisal Samad said: “Due to the global economic crisis, our RMG industry is suffering. Such surveys help to find out the real scenario. During the COVID-19 period, BGMEA conducted a survey. Primarily, manufacturers felt hesitation to participate.

“But when we were able to do the job, the government issued 14 circulars based on the survey. It helped us to bounce back.”

The former BGMEA vice president said: “We have a lot of chances to increase exports to the USA through reduced taxes. We are using their cotton, and we may negotiate with them that if they reduce the import tax for your cotton-based clothes, their cotton export to Bangladesh will increase.

“Our exports to the USA will also rise. If I become president, I will work on this,” he added.