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28 October, 2019 03:01:25 AM
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RMG export witnesses sluggish growth in Q1 of FY19-20

NON- TRADITIONAL DESTINATIONS
SHARIF AHMED, Dhaka
RMG export witnesses sluggish growth in Q1 of FY19-20

The country’s readymade garment (RMG) export to most of non-traditional markets witnessed negative growth during the month of July-September— first quarter (Q1) of the current fiscal year (FY 2019-20).

Garment shipments to non-traditional—mostly major markets only grew by 0.29 per cent year-on-year to $968.2 million in month of (July-September) of the current fiscal year 2019-20 compare to the same period of the previous year 2018-19 which was $965.33, according to Export Promotion Bureau (EPB).       

Rather than traditional markets such as— US, Canada, and Europe, others are considered as non-traditional markets. Among them, Chile, China, Japan, India, Australia, Brazil, Mexico, Turkey, South-Africa, Russia, these are the markets where Bangladeshi apparel exports showed negative growth in month of (July-September) of the current fiscal year 2019-20.        

Siddiqur Rahman, former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told The Independent that the Apparel exporters attributed to a number of factors including sluggish EU economy, the trade tension between China and US and recent declining price trend of raw materials, especially cotton and yarn, for the poor performance of the RMG exports.

Explaining the reason, Rahman said that previously, Apparel makers did not want to go to those markets because it takes lot of hassle and time to enter a new market and a businessperson needs to talk to different people, make their own research and gradually penetrate into the market.

Secondly, when a manufacturer enters a new market he or she needs to lower the product price rather than average. Because of these two reasons, garment manufacturer didn’t want to explore the market but since the government is kind enough to provide the cash incentive for so long period of time, garment owners have started to explore the new destinations and markets, said Rahman.

“However, the number of work orders had declined followed by China and US trade tension, global impacts like falling consumption, and devalued currencies in major competitor countries, he added.

When asked, he answered and said that the cash incentive is 4 per cent which was set from last year (2018) at this moment.

“Presently, non-traditional markets are contributing 15-16 per cent of total export earnings,” he informed.           

July-September of 2019-20 financial year, Bangladesh earned $109.98 million from China with negative growth 1.65 per cent growth from $111.83 million in the same period of financial year 2018-19, according to Export Promotion Bureau (EPB).    

China, the largest apparel supplier of the world has started importing products from us because the government of China has allowed duty-free access to over 5,000 Bangladeshi products. There are 40 to 50 crore people live in China obtains high-middle income group, said Siddiqur.     

July-September of 2019-20 financial year, Bangladesh earned $163.12 million from India with growth 12.42 per cent growth from $145.10 million in the same period of financial year 2018-19, according to Export Promotion Bureau (EPB).

Former Senior Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Faruque Hassan explained a couple of reasons and said “Famous international retail brands such as Zara and H and M have established their business in India and we are the biggest supplier for them.”        

“Another reason is that Indian domestic market has grown and the numbers of fashion conscious consumers have increased. We import Ready-made garments (RMG) raw materials such as- cotton, machinery from India, so there export is also increasing. It is a win-win situation from both the countries side” he said.

July-September of 2019-20 financial year, Bangladesh earned $26.12 million from Chile with negative growth 5.29 per cent growth from $27.58 million in the same period of financial year 2018-19, according to Export Promotion Bureau (EPB).

July-September of 2019-20 financial year, Bangladesh earned $28.97 million from Brazil with negative growth 26.10 per cent growth from $39.20 million in the same period of financial year 2018-19, according to Export Promotion Bureau (EPB).

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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