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Bangladesh garment exports take a
hit
DHAKA - Export growth
of woven garments has drastically declined in
Bangladesh following the abolition of the quota
system, creating skepticism about the viability of
the country's apparel sector in the post-MFA
(Multi Fiber Agreement) era. The growth of woven
garment exports has dwindled in four months out of
five of the current year till May since the quota
umbrella was removed from the world market on
January 1, according to the latest statistics from
the Export Promotion Bureau (EPB).
Experts
in the apparel sector think the sharp fall in the
export growth is the fallout of the expiry of the
Multi Fiber Agreement (MFA), and fear that the
challenge of globalization might prove telling on
the country's highest forex-earning sector.
Apparel traders, however, believe the tough days
won't last long. They believe the recently imposed
"quantity restrictions" on China, meant to contain
the rapid growth of its textile exports, will
break the existing stalemate in garment product
exports.
Woven garment exports from
Bangladesh grew 1.7% to nearly US$3.6 billion in
the last fiscal year, contributing about 41.6% to
total export earnings. But the sector had recorded
an 8.59% export growth in the previous fiscal year
(2003-2004), exporting some 90.48 million dozen
woven items worth $3,538.07 million to some 108
destinations across the world.
EPB
statistics show that woven garments are among the
seven categories of export products that recorded
growth over the previous year's performance but
failed to reach the target. Woven products worth
$3,598.20 million were exported in FY2004-2005,
6.54% lower than the export target of $3,850
million. The export earnings had stood at
$3,538.07 million in 2003-2004, $3,258.27 million
in 2002-2003, $3,124.56 million in 2001-2002 and
$3,364.20 million in 2000-2001 fiscal year.
Sources in the EPB said that after the
quota was lifted, the country exported woven
garments worth $296.07 million in January 2005
while it was $376.61 million during the same
period in 2004 - a crushing fall of 21.39% on the
growth track. Woven garments fetched $292.92
million in February, $264.55 million in March,
$236.57 million in April and $311.97 million in
May 2005 compared with $222.90 million, $304.12
million, $263.10 million and $316.49 million
during the same months of the year 2004.
Asked about the causes of the export
crunch, First vice president of Bangladesh Garment
Manufacturers and Exporters Association (BGMEA), M
A Salam, said lack of expansion of production
capacity and price reductions in the quota-free
era were the main causes of the downturn. "But the
tough times are about to end ... already the US
has imposed quantity restrictions on China and the
European Union is also contemplating imposing [an]
embargo on China. These will be positive for
Bangladesh." Salam, however, was critical of the
government's move to raise the minimum wage
structure (now 930 taka, or US$14, monthly)
thrice. "It will be suicidal for us, as the
garment industry is fighting for survival."
BGMEA president Annisul Huq admitted that
export growth in the European market was on the
decline. Huq urged the government to explore
methods of market expansion for woven garments in
European countries, failing which, he thinks, the
country will face a severe setback in export
trade. "Apart from this, the government should
establish central warehouses, and seek SAARC
(South Asian Association for Regional Cooperation)
and regional markets to survive in the post-MFA
era," the BGMEA chief said.
(Asia
Pulse/UNB) |
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