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

Emran Sheikh Jafar () and Schmitz Andrew
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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

Journal of Agricultural & Food Industrial Organization, 2023, vol. 21, issue 1, 89-98

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.

Keywords: coronavirus; cotton; cotton supply price elasticity; COVID-19; global supply chain; producer surplus; ready-made garments (RMG); textile producers (search for similar items in EconPapers)
JEL-codes: D61 E32 F16 Q11 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/jafio-2022-0027

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