Value addition in Bangladesh's RMG industry fluctuating

22 Mar '22

2 min read

Pic: Sk Hasan Ali / Shutterstock.com

Value addition in the Bangladesh readymade garment (RMG) sector has been fluctuating in recent years, with exporters attributing the pandemic-induced high prices of raw materials and absence of long-term policy support to this. Local RMG items' value addition remained almost static in the range 60-64 per cent from fiscals 2012-13 to 2018-19, according to Bangladesh Bank data.

But it fell to 56.49 per cent in fiscal 2019-20, and went up to 59.13 per cent in FY21.

In 2019-20, Bangladesh fetched $27.94 billion from RMG exports, while it imported raw materials worth $12.26 billion. Thus, the country's net RMG exports stood at $15.67 billion in that fiscal, showing a 56.49 per cent value addition.

The percentage further decreased to 55.80 per cent during the first half (H1) of fiscal 2021-22, as net RMG exports stood at $11.10 billion against exports worth $19.90 billion and raw material imports worth $8.79 billion, an English-language financial newspaper in the country reported.

The value addition remained lower than the pre-pandemic 64.32 per cent in fiscal 2018-19, the data showed.

Bangladesh is dependent on imported raw materials like cotton, petrochemicals and chemicals, despite being the second largest exporter of RMG.

The value addition of the knitwear sub-sector is higher than the woven segment, as the former sources 80 per cent of its required raw materials from the domestic market, while woven is largely dependent on imported fabrics.

Fibre2Fashion News Desk (DS)

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