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COVID forces Bangladesh textile traders to drop prices

May 05, 2021
COVID forces Bangladesh textile traders to drop prices

Dhaka, Bangladesh

Since the beginning of the COVID pandemic in 2020, about 50% of the Readymade Garments (RMG) manufacturers had to accept orders at lower prices than before, revealed a study conducted by the Institute for Human Rights and Business (IHRB) and the Subir and Malini Chowdhury Center for Bangladesh Studies, with support from UNDP Bangladesh and the Swedish government.

The study titled ‘Weakest Link in Global Supply Chain: How the Pandemic is Effecting Bangladesh Garment Workers’ further adds that about 80% of all the Bangladesh textile exports have been affected in one or another way because of the pandemic.

According to the study, the buyers are asking for larger price cuts, in values that are beyond the regular year-over-year reductions. In March 2020, when the pandemic began, about 77% of the manufacturers in Bangladesh had orders cancelled without payments made in advance.

Even now, only 27% of the suppliers have confirmed that they have been paid in full for most or all of their orders.

Liaquat Ali, Chairman of Balaka Stitch Limited, mentioned that they were taking orders at prices much lower than their production cost. He added that by doing so, they were able to keep their business afloat and pay the workers without having to go under.

The study further states that manufacturers now wait for an average of 77 days before receiving payments. 57% of suppliers who participated in the survey conducted by the research team said that if the same situation continues, they will be soon forced out of business.

Source: Dhaka Tribune

Image Source: Pixabay

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