Bangladesh is the second-largest exporter of ready-made garments (RMG) in the world, but it faces a price disadvantage in the US and EU markets compared to its competitors.
In 2022, the average price of Bangladeshi RMG exports to the EU was USD 17.27 per kg, while India and Sri Lanka secured prices of USD 23.27 and USD 28.54 per kg respectively.
In the US market, Bangladesh's RMG exports were priced at USD 3.10 per square meter, while India and Sri Lanka commanded prices of USD 3.80 and USD 4.26 per square meter respectively.
There are several reasons for this price disadvantage. One reason is that Bangladesh's RMG industry is heavily reliant on a few sectors, with approximately 80 percent of apparel exports originating from five specific segments. This makes it difficult for Bangladeshi exporters to negotiate higher prices.
Another reason is that Bangladesh lacks a deep-sea port, which makes it difficult and expensive to export goods. This also gives foreign buyers an advantage in price negotiations.
Finally, Bangladeshi RMG factories have not invested enough in research and development, which has limited their ability to produce high-value garments.
To address these challenges, Bangladesh needs to diversify its export portfolio, invest in research and development, and improve its negotiation skills.
