Many foreign companies are set to pay higher prices for Bangladeshi clothing imports in return for the industry offering its workers better pay and conditions, according to officials cited by Reuters.

The move comes after factory owners agreed in June to increase minimum monthly pay to BDT1,300 (US$18.66) within three months - a response to riots which left one worker dead and more than 150 hurt, with dozens of factories forced to close down for weeks.

But industry leaders said they could not afford to fund the wage demands without increasing prices. Garment workers currently earn a minimum monthly wage of BDT950, only one-third the pay of a farm worker.

US retailers Wal-Mart and JC Penny have already agreed to increase prices provided that wages and working conditions improve, said Qayum Reza Chowdhury, president of Bangladesh Garments Buying Association (BGBA).

"Most of the big firms are willing to raise prices, but the bottom line is whether the factories are ensuring social compliances or not," he was reported by Reuters as saying.