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Bangladesh garment value addition reaches 63 per cent

Gross value addition in the readymade garment sector of Bangladesh was 63.23 per cent in the first half of the current financial year comparatively value addition last financial year was 60.94 per cent.

Value addition is calculated considering the import price of raw materials including cotton, synthetic/viscose fiber, synthetic/mixed yarn, cotton yarn, and textile fabrics and accessories. Import price of raw materials in the July-December period of fiscal ’19 was 36.77 per cent of total export earnings from the readymade sector in the period. Thus raw material prices shared 36.77 per cent of the total value of readymade garment exports. This means local value addition is estimated at 63.23 per cent.

Meanwhile the spinning sector in Bangladesh is in danger of losing its price edge with other yarn and fabric producing countries. When the price of locally produced yarn and fabric increases they will remain unsold and overburden millers who are already operating in losses. This will give a huge blow to the backward linkage industry. When the forward sector starts using imported yarn and fabric, the situation will be much worse as a lump sum will be required for importing yarn and fabric and will shrink hard-earned valuable foreign currency.

 
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