Under the influence of the global financial crisis, Bangladesh’s textile and garment industry, which accounts for 75% of its export earnings, may face more serious problems if emergency measures are not taken to deal with it.
Personnel from the Bangladesh Textile Industry Association said that the textile industry, which has invested nearly 6 billion US dollars, is now facing an unprecedented crisis. About 3 billion US dollars worth of yarn cannot be sold and is backlogged in warehouses. The financial crisis that began in September 2008 caused international cotton prices to continue to fall. Competitors of Bangladesh dumped cotton yarn at low prices because these countries took advantage of their advantages in producing cotton, textile equipment and dyes, and received preferential policies from the government to enhance the They are export competitive. If this situation continues to develop, Bangladesh’s main export industry, the garment industry, will be in danger and put the national economy into huge difficulties.
Bangladesh currently has 350 spinning mills, providing 500 million kilograms of yarn to knitting factories and 180 million kilograms of yarn to weaving mills every year. If domestic yarn consumption declines, garment industry exports will decline, leading to a decline in foreign exchange reserves. Problems in the garment industry will also affect all banks, as the banking sector accounts for the highest share of credit and investment in the textile industry. The government should take prompt measures to address the challenge by providing specific incentive packages to increase cash incentives for garment exports from the current 5% to 15%, while strictly prohibiting the import and dumping of illegal yarns.
Due to the impact of the financial crisis, international clothing prices began to decline. Bangladesh’s clothing export prices in 2009 dropped by 20% compared with the same period in 2008. 2009 will be a difficult year for the development of Bangladesh’s garment industry, and it must receive full support from government policies to overcome the current difficulties.
In addition, the Bangladeshi garment industry is worried that China has recently reduced tariffs on the export of low-end clothing products, which will create competition for the export of Bangladeshi clothing products, because most of Bangladeshi products are low-end exports to the international low-price clothing market. product.
