International cloth buyers ask Bangladesh to cut prices

File photo of employees working at a garment factory in Dhaka July 8, 2008. REUTERS/Andrew Biraj/Files

DHAKA (Reuters) - International cloth buyers and retailers at a rare meeting in Dhaka on Thursday asked Bangladesh to reduce prices of the ready-made garments (RMG) to make them competitive in the global markets, a key business leader said.

“They have suggested us to make all-out efforts to keep the prices at least at the level of what the price is being offered by India, Pakistan, China and Vietnam, the major competitors of us,” said Abdus Salam Murshedy, the president of Bangladesh Garment Manufacturers and Exporters Association.

More than 50 major buyers including Sears Holdings Global Sourcing Ltd, Marks & Spencer Plc, Hennes & Mauritz International, Wal-Mart, JC Penney, Tesco International and Nike Inc, attended the meeting with Bangladesh’s textile exporters.

“Imports of RMG by the United States and European countries, which buy almost 90 percent of Bangladesh garments, have shrunk by about 10 percent in January compared with the same month of previous year,” Murshedy told a news conference after the meeting. “This makes us worried,” he said.

Bangladesh’s central bank on Wednesday imposed a ceiling on lending rate of loans at 13 percent to offset the fallout of global meltdown and also to help export sector.

At present the lending rate is between 14 percent and 18 percent.

Murshedy termed the Bangladesh Bank’s lending rate cut a “little step forward” to help recession-hit sectors and called for bringing down the interest rates to single-digit at least for an interim period of downturn.

Ready-made garments earn the cash-strapped south Asian country about $11 billion on average a year and the sector employs more then 2.5 million workers, mostly women, in nearly 5,000 factories.