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Cut in CM rate affects Bangladeshi RMG exports

With a decline in export orders this has led to an 'unhealthy' trend of subcontracting in Bangladesh. The trend has become strong lately causing substantial export revenue loss to the country apart from strengthening bargaining power of international buyers.

With many exporters, including small and medium size RMG factories, especially the new players offering cutting and making (CM) charges at a lower rate than offered by mainstream market players, they are undercutting rivals by about 10-15 per cent. The CM rates in the case of knitwear items declined by 15 to 20 per cent last year and as per the BGMEA data, during the last one year, the CM of woven garments declined by 10-12 per cent.

Experts point out that the foul practice followed by some industry players is forcing other factories in the sector to reduce their prices as well. More than 1,200 factories are said to be involved in sub-contracting in the RMG industry, employing nearly 1.0 million workers.

 

www.bgmea.com.bd

 
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