Bangladesh textiles face boycott over Uzbek cotton

DHAKA Oct 18 (Reuters) - Major U.S. and European retailers have vowed to boycott garments from Bangladesh made of cotton from Uzbekistan, as a protest against alleged child labour in the central Asian nation, a Bangladesh industry official said.

Bangladesh fills 65 percent of its annual demand of 2.7 million bales of cotton from Uzbekistan, the world's third-largest cotton exporter, officials said.

Retailers Wal-Mart (WMT.N), Tesco (TSCO.L), Hennes & Mauritz (HMb.ST), JC Penney (JCP.N) and Marks and Spencer (MKS.L) have notified Bangladesh of their decision, said Abdul Hai Sarker, the president of the Bangladesh Textile Mills Association.

"Several European and U.S. firms have already told us they will not buy Bangladeshi ready-made garments if we produce them with cotton sourced from Uzbekistan, due to allegations of child labour in the industry," Hai told Reuters on Saturday.

"Tomorrow we will send a letter to the foreign ministry of Uzbekistan as it is very important for our principal exports."

Readymade garments are Bangladesh's main export, accounting for $10.7 billion, or 76 percent, of its annual export income in the fiscal year to June 2008.

The south Asian nation's garments enjoy duty free access to European markets and it is pressing for similar access in the United States, the single largest buyer of its garment products.

"If we cannot import from Uzbekistan we have to spend at least six cents more for each pound of cotton to import from U.S. sources, which ultimately will add up to 20 percent cost for finishing products," Hai added.

The decision would make the country's garment exporters uncompetitive globally, said Anwarul Alam Chowdhury Parvez, president of the Bangladesh Garment Manufacturers and Exporters Association, which is in talks with buyers.

"We are negotiating with them and efforts will continue to persuade them," he added.

The officials gave no estimate of how much the industry stood to lose from the boycott.

In a letter to Bangladeshi authorities, Nasriddin Najimov, the Uzbek deputy minister for foreign economic relations, investments and trade, dismissed the talk of child labour as a "conspiracy and mere rumour".

Uzbek law prohibits child labour, although it permits employment from 16 years of age, he said.

Bangladesh also imports cotton from India, Pakistan, Turkmenistan, the United States and some West African countries.

It spends nearly $1.1 billion to meet its annual cotton demand, officials said. (Reporting by Serajul Islam Quadir; Editing by Clarence Fernandez)