Textile industry is the pillar industry of Bangladesh’s economic development

In 2020, the total population of Bangladesh reached 166 million, making it one of the most densely populated countries and one of the poorest countries in the world. Bangladesh used to be the second largest textile exporter in the world, second only to China. In the past two years, it has been caught up by Vietnam. The second largest textile exporter in the world was replaced by Vietnam, and it will move to third place in 2020.

The textile and garment industry is a pillar industry for Bangladesh’s economic development, and garment exports account for more than 80% of Bangladesh’s total merchandise exports. There are more than 2,000 textile factories and more than 6,000 garment processing factories in Bangladesh. The textile industry employs more than 5 million people, of which about 80% are women.

The terminal garment manufacturing industry is the main body of the industrial chain and the pillar industry of Bangladesh, accounting for 13% of the country’s GDP. The annual output of Bangladeshi denim clothing is about 200 million pieces, and its share of the European import market is 27%, which has surpassed that of China.

Bangladesh has abundant labor resources and low labor costs. The minimum wage equivalent to RMB is only about 416 yuan per month, which is less than half of the minimum wage in Vietnam and Cambodia. Its advantages in local low-cost raw materials and labor not only alleviated the pressure of increasing domestic labor costs, but also quickly seized the surrounding market.

After the recovery of exports during the period of new crown pneumonia, clothing exporters felt the pressure of abnormally rising production costs due to rising yarn prices and freight costs. Entrepreneurs said that due to Bangladesh’s total reliance on imported goods to make ready-made garments (RMG), unit costs have soared by 30% from a year ago.
Rising cotton prices have pushed up yarn prices in the local market. As yarn prices affect the profitability of the apparel industry, apparel exporters and textiles are engaged in a silent war

Fazlul Hoque, managing director of the Narayanganj-based Plumi Fashion Company, said that compared with August last year, the unit production cost of his factory in August this year increased by nearly 30%. He also said that mainly yarn prices and freight have affected the production costs of the apparel industry.

Although production costs have increased by 30%, the price of each garment exported by Bangladesh has fallen by 3.7% in the past year due to the decline in demand during the new crown pneumonia era. The worst is that 80% of clothing orders are cancelled! 2.26 million People are unemployed!

“Unfortunately, however, international retailers and brands do not want to adjust the additional production costs by increasing the prices of individual clothing items. Therefore, we must continue to do business with our buyers at lower prices,” Hawke said. “Most suppliers have always survived by exporting higher quantities of goods, not by higher value.