Bangladesh’s apparel exporters are hoping US retailers and brands pay a fair price for their products. For one, exporters say, they have spent huge amounts on beefing up workplace safety and that has increased the cost of production 25 to 30 per cent. Their complaint is buyers always demand higher compliance at the factory level but do not want to increase the price of products. The US is the single largest export destination for Bangladesh.
Factories in shared or non-purpose built premises need to relocate. Firms in such premises which were not able to meet the new standards had to move and often ended up in more remote regions. Such factories have to bear the relocation costs and do not receive financial support from buyers, the government or their industry associations.
Another reason Bangladesh’s exporters do not get fair and reasonable prices for their products is lack of negotiation skills. Exporters get lower prices for readymade garment products than what Cambodian and Vietnamese exporters get from global buyers. Buyers do not want to pay higher prices, although the cost of production will go up further with wage hike, port congestion and higher transportation cost.