Ready Made Garments
Garment orders may slow down
Garment makers see a slowdown in orders from international buyers who have now taken a wait-and-see stance as the prices of raw materials are on the slide worldwide pushing the outsourcing agents to rethink about the prices they would offer.
The buyers of all brands are waiting to see where the prices of cotton and yarn reach, because prices of basic raw materials are on the decline following a slide in demand in the manufacturing countries, businessmen said.
Last year the buyers increased the prices of garment items sourced from Bangladesh to adjust the higher prices of raw materials, but this year the prices of those materials are declining.
Following the trends among the buyers, the garment makers are saying the next three months — July, August and September — will go dull.
“But the orders will pick up momentum from early October. The buyers are now studying the price trends of cotton and yarn,” said Mohammad Abdullah, managing director of Nassa Group.
He said the cotton price might become stable within another 15 days as the price of the fibre is now hovering around one dollar from its peak at $2.35 per pound in March.
Cotton is now trading at rates between $1.17 per pound and $1.13 per pound at futures market in New York. Yarn price also declined to $4.50 per kg from its $7 per kg a few months ago.
The international buyers either stopped placing orders or went for short buys when they saw that the prices of raw materials including cotton and yarn started declining, Abdullah said.
The buyers paid at least 40 percent higher price for each unit of garment item last year to adjust the higher prices of raw materials, but this year they might cut the prices to adjust with the lower prices of raw materials, he said.
As a result, cutting and making charges for garment items will either remain the same or in some cases will increase, but the overall prices of per unit of garments will decline to a measure, he added.
The export of garment items might rise in volume this year as the orders from China, the largest apparel supplier worldwide, are shifting to Bangladesh for higher costs of production there, Abdullah said.
The orders from other competing countries such as Turkey and Pakistan are also shifting to Bangladesh for other reasons, he said.
Moreover, orders are pouring in Bangladesh from new destinations like Japan, South Africa, Australia, New Zealand and some Latin American countries, he said.
Shafiul Islam Mohiuddin, president of Bangladesh Garment Manufacturers and Exporters Association, said the issuance of certificates of utilisation declaration declined nearly 15 percent in July from June.
“This indicates that there might be a slowdown in orders for the garment items in July, August and September although there is good indication that it should change for better from October onwards,” he said.
Mohiuddin also said, besides the higher prices of raw materials, the overall sales of clothing items declined in the EU market for bad economic situation there and for higher prices of petroleum products.
A German buyer having office in Dhaka said generally orders decline in the months of July, August and September every year.
“The trend is good. The price slump of raw materials is also a factor. The export growth of garments from Bangladesh may continue to be higher this year also,” said the German buyer, requesting not to be named.
Price slump of cotton and yarn is true to some extent, but this is a lean season as people are seeing changes in fashion and styles in different countries in Eurozone, he said.
“You will see a lot of fashion shows nowadays in Italy, France and other European countries for changing fashion and style,” the buyer said.
Now the buyers will choose the styles from different fashion houses to place orders to the manufacturers for execution, he added.
-With The Daily Star input
