Industry Desk: Prices of per unit apparel items exported from Bangladesh to its single largest destination – the USA – have increased by 25.6 per cent in the first five months of the current year, according to a recent study.
Industry leaders, however, differed on the information about the price hike identified by the United States Fashion Industry Association (USFIA) on July 22.
At the same time, unit price of Vietnam-made apparel items in the US market shot up by 23.4 per cent, followed by India-made items which posted a 21.2 per cent surge, according to the survey findings. Unit price of apparel imports from China, however, grew by only 3.3 per cent during the period under review, the study said citing the US official data. On an average, unit price of US apparel imports across the world increased by 10.7 per cent in the first five months of the current year, according to the study.
As companies are moving sourcing orders to Bangladesh, Vietnam, and India, the average price of US apparel imports from these countries – the main alternatives to China – have all gone up by more than 20 per cent in 2019 (January-May) year-on-year, it said. Citing one of the surveyed executive’s comments, the report said, “There is not enough capacity outside China and capacity will start to come at a higher premium in other countries such as Bangladesh and Vietnam.”
Regarding Bangladesh, the report said the surveyed US-based brands’ executives still see Bangladesh not as attractive as many of its competitors regarding speed to market, flexibility and agility and risk of compliance.
The study also held responsible the narrow categories of products Bangladesh can make, saying that during last 10 years, 60 per cent of Bangladesh’s apparels exported to US was cotton-based items. Meanwhile, unit prices of per 100 kilogramme (kg) apparel items exported to European Union during January to May in 2019 increased by 1.84 per cent to US$ 1570.74 which was $ 1542.35 in the same period of 2018, according to Eurostat data compiled by Bangladesh Garment Manufacturers and Exporters Association (BGMEA). On the other hand, per unit prices of garment items shipped to the EU from Vietnam increased by 22.65 per cent during the period, followed by 3.39 per cent from China, 2.54 per cent from Cambodia while unit price of garments shipped from India declined by 3.16 per cent, the BGMEA data showed. Vietnam is the second largest garment exporter to US and the sixth largest to EU. When asked, BGMEA president Dr Rubana Huq said USFIA report doesn’t match with the data published on the website of OTEXA. “The data as per USFIA report looks faulty or may have a different calculation which is not understandable.” Citing the OTEXA data, she said unit price of per square metre has increased by 6.19 per cent during the January-May period of 2019 year-on-year. She also suggested taking account of the price trend for the past few years when Bangladesh had weaker price base. During the period between 2015 and 2018, USA’s import price declined by 4.87 per cent from the world, followed by 12.56 per cent from China, 3.35 per cent from Bangladesh, 2.11 per cent from India and 2.7 per cent from Vietnam except Cambodia that witnessed a rise by 1.19 per cent. On the other hand, during the period, EU’s import price declined by 0.84 per cent from the world, 0.68 per cent from China, 2.9 per cent from Bangladesh, 2.74 per cent from India, 1.87 per cent from Cambodia and 2.0 per cent from Vietnam. Ms Huq, however, said in the first five months of 2019, Bangladeshi-made garment price was growing. “We should wait until the end of the year to see how far this upward movement sustains, but past experience showed that there is a short-lived upward trend in price after the minimum wage increases,” she noted. Echoing the BGMEA leader, Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), also disagreed with the USFIA data over price hike of local garments in US. He said 25 per cent price increase is huge which is not true. Work orders from the US are increasing which have created the possibility of raising the prices of locally-made garments, he added. He, however, suggested entrepreneurs’ effective price negotiations in this regard.
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