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Impact of COVID-19 (2020–2022) on Cotton and Garments Market of Bangladesh: A Small Country Case

Author

Listed:
  • Emran Sheikh Jafar

    (Ben Hill Griffin, Jr., Eminent Scholar and Professor, Food and Resource Economics Department, University of Florida, Gainesville, FL, USA)

  • Schmitz Andrew

    (Ben Hill Griffin, Jr., Eminent Scholar and Professor, Food and Resource Economics Department, University of Florida, Gainesville, FL, USA)

Abstract

Bangladesh imports roughly 98% of cotton from abroad to produce fabric or yarn (USDA 2020. Cotton and Products Update. Bangladesh. Also available at https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Cotton%20and%20Products%20Update_Dhaka_Bangladesh_11-30-2020). The production of textiles in Bangladesh depends on the price of raw material, the demand for garment products in the importing countries, smooth supply chain management, and the domestic supply of cheap garment laborers. The global pandemic of COVID-19 disrupted the supply chain of almost all physical goods and services, including textiles. It caused the price of textiles to fall due to a drop in worldwide demand, and increased the marginal cost of textile production due to supply chain interruptions. This paper shows how the decline in the demand for garments, coupled with an increase in cost, shrinks the producer welfare of textile manufacturing and garment exports of the small producing country, Bangladesh.

Suggested Citation

  • Emran Sheikh Jafar & Schmitz Andrew, 2023. "Impact of COVID-19 (2020–2022) on Cotton and Garments Market of Bangladesh: A Small Country Case," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 21(1), pages 89-98, May.
    • Handle: RePEc:bpj:bjafio:v:21:y:2023:i:1:p:89-98:n:6
    DOI: 10.1515/jafio-2022-0027
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    More about this item

    Keywords

    coronavirus; cotton; cotton supply price elasticity; COVID-19; global supply chain; producer surplus; ready-made garments (RMG); textile producers;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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