High value garments
Wednesday, 4 June 2008
Our readymade garments (RMG) exporters should realise that earnings from export to the US fell not only due to the competition Bangladesh is facing from the countries enjoying quota- and duty-free access to the US. The point is the US market has shrunk considerably for all countries that export to it low-end value or common RMG products because of the continuing recession in that country.
The demand for the common apparels that Bangladesh exports to the US and other developed countries is income elastic. The incomes of common consumers in the USA and other developed countries have been falling due to economic slowdown. But the demand for higher priced garments, bought by the affluent in those countries, are income inelastic as these people tend to buy at a steady rate, regardless of fluctuations of prices of their income. The Bangladeshi RMG exporters need to produce higher quality and priced garments, still having good demand in the markets of the developed countries including the US.
A fast switch-over would probably enable our RMG producers to avoid the competition they now face from some sub-Saharan, African and Asian countries in exporting common apparels. Bangladeshi garments operators, with their experience, should be able to change their production capacity to do it. It would provide our RMG sector a new lease of life and it would make fatter profit margins to reach a new level.
Abul Khair
Gulshan, Dhaka.
The demand for the common apparels that Bangladesh exports to the US and other developed countries is income elastic. The incomes of common consumers in the USA and other developed countries have been falling due to economic slowdown. But the demand for higher priced garments, bought by the affluent in those countries, are income inelastic as these people tend to buy at a steady rate, regardless of fluctuations of prices of their income. The Bangladeshi RMG exporters need to produce higher quality and priced garments, still having good demand in the markets of the developed countries including the US.
A fast switch-over would probably enable our RMG producers to avoid the competition they now face from some sub-Saharan, African and Asian countries in exporting common apparels. Bangladeshi garments operators, with their experience, should be able to change their production capacity to do it. It would provide our RMG sector a new lease of life and it would make fatter profit margins to reach a new level.
Abul Khair
Gulshan, Dhaka.