RMG work orders rebounding

Bangladesh has been witnessing a rebound in garment work orders from American clothing retailers and brands for the next season after securing a competitive tariff rate from the Trump administration in the final settlement.

Buyers are also confirming the pending work orders with a much more favourable tariff rate of 20 percent.

India and Vietnam, Bangladesh's competitors in the apparel trade in the US, secured 50 percent and 20 percent tariff respectively.

"We can sense the rebound of work orders, the buyers are coming here and confirming the pending work orders and negotiating for next season," Mohammad Sohel Sadat, chairman of Shin Shin Group, an exporter to the US, told The Daily Star.

The inflow of work orders for the next season looks good, said SM Khaled, managing director of Snowtex Group, one of the major garment exporters.

It is also expected that a significant volume of work orders will shift from China and India to Bangladesh due to higher tariffs levied by the Trump administration.

However, the prices of apparel may go up in the American market as the buyers will have to pay a higher tariff on the import of goods, he added.

The retailers and brands are still offering lower prices, and in some cases, some of the buyers are asking for a certain portion of the additional tariff.

For instance, of the 20 percent reciprocal tariff, the US retailers are asking the fabric suppliers to bear one-third of the amount and the manufacturers another third; the remaining portion will be borne by the retailers and brands themselves, exporters said.

However, the retailers and brands are asking for such a facility for next season as they are planning on purchasing in big volumes, the suppliers said.

The reciprocal tariff by the US has put indirect pressure on the suppliers in their dealings with the European buyers, said Kalpan Hossain, managing director of Dekko Legacy Group, which mainly exports garments to the European markets.

One of the major garment suppliers asking not to be named said a few of his American buyers have already requested for further price cuts to adjust the additional tariff rate.

He is yet to respond as his profit margin is too low as it is.

The volume of work orders for yarn with the spinning mills is on the rise with the increase in work orders from the US buyers, Showkat Aziz Russell, president of the Bangladesh Textile Mills Association, told this correspondent.

The local garment exporters are expecting a good volume of work orders would shift from China, the leading garment supplier worldwide, after it was levied a 55 percent tariff.