A file photo shows workers sewing clothes at a garment factory on the outskirts of Dhaka. Value added in ready-to-wear products fell to an all-time high of 55.80% in the July-December period of the current fiscal year 2021-22, mainly due to an increase in prices of raw materials in the world market.
The value added of ready-to-wear products fell to an all-time high of 55.80% during the July-December period of the current fiscal year 2021-22, mainly due to an increase in the prices of raw materials on the world market.
According to Bangladesh Bank data, the added value of RMG products in the first half of FY21 was 63.37%.
The data showed that the value added in Bangladeshi apparel products had started declining since FY 2019-20.
Value added in FY20 decreased to 56.84% from 64.32% in FY19.
Although the value added of RMG products in FY21 increased slightly to 59%, it showed a downward trend in the first half of FY22.
Exporters said value added had declined since FY20 due to the global Covid outbreak, as the pandemic disrupted the supply chain and raised commodity prices.
BB data showed that apparel exports in the first half of FY22 grew 28%, while commodity imports grew 54.46% over the period.
“The value added of apparel products has declined over the past two years as commodity prices have increased over the period due to the Covid pandemic,” Vice President Md Shahidullah Azim told New Age on Sunday. of the Bangladesh Garment Manufacturers and Exporters Association. .
He said value added has also declined due to rising freight costs and business operating costs amid the pandemic.
“Commodity prices also increased over the period, but they are still lower than commodity prices,” Azim said.
BB data also showed that the added value of RMG products was 60.94% in FY18, 61.78 in FY17, 63.66 in FY16, 62 .37 in FY15, 60.51 in FY14 and 61.76 in FY13.
According to BB Quarterly Review data, the added value of RMG products in the October-December period of FY22 decreased to 57.80% from 61.62% in the same quarter of FY22. exercise 21.
Md Fazlul Hoque, former chairman of the Bangladesh Knitwear Manufacturers and Exporters Association, said there could be many factors to reduce the added value of RMG products, but rising raw material prices were the key factor.
He said that the use of synthetic fibers has increased in the world in recent times and that Bangladesh is completely dependent on the import of fabrics other than cotton, which could be another reason for the decline in the value added of Bangladeshi clothing products.
Besides, the cost of doing business has also increased amid the pandemic, Fazlul added.
BB data showed that in October-December of FY22, the value of raw material imports amounted to $4.57 billion, or 42.20% of the total export revenue of the RMG sector. .
Thus, the sector’s net exports amounted to 6.26 billion dollars, or 29.48% more than those of the previous quarter and 37.08% more than those of the same quarter of the previous year, a- he showed.
To calculate the value of imports of raw materials, the BB takes into account the value of components such as raw cotton, synthetic fibres/viscose, synthetic/blend yarns, cotton yarns and textile fabrics and clothing accessories at the instead of back-to-back letters of credit. .