The Financial Express

RMG exports to one-third of EU states rise in July-Dec

| Updated: January 20, 2021 14:04:15

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Bangladesh's apparel exports to one third of the 27 European countries, including Germany, the Netherlands and Poland, increased in the first half of fiscal year (FY) 2020-21 amid Covid-19.

Denmark, Hungary, Czech Republic, Latvia, Slovakia and Slovenia also raised their garment imports from July to December, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Insiders, however, said exports increased at a time when overall apparel shipments to the European Union (EU) declined by 1.28 per cent to $9.69 billion in the corresponding period last year.

They attributed transshipment of apparel items to other EU countries through Germany, the Netherlands and Poland for a rise in exports to those destinations.

Knit and woven item exports to Germany grew by 3.75 per cent to $2.75 billion, the Netherlands by 8.34 per cent to $538.67 million and Poland by 11.05 per cent to $649.36 million in the first half of this fiscal.

Denmark imported ready-made garment (RMG) worth $420.06 million, up by 19.42 per cent from the July-December period of 2019-20, according to the BGMEA data.

Talking to the FE, BGMEA president Dr Rubana Huq said Germany was the second-largest market for Bangladeshi apparel.

Export to Germany, which was hardest hit by the pandemic, plunged to $4.79 billion in FY 2019-20.

In 2020, export was slashed by 25.75 per cent. But export in the second half (July-December) grew by 3.75 per cent, Dr Huq cited.

Citing data, she said overall RMG export fell by 2.99 per cent while export to Germany grew by 3.75 per cent mainly due to good performance of woven there.

"Export to Germany cannot be generalised as the consumption of its local market only since it's believed that a significant part of the goods exported there is transshipped to other EU countries."

Citing the EU data, Dr Huq said Germany's sourcing from other countries is evolving. Its import from China, Cambodia, Vietnam, Sri Lanka and Indonesia has gone down in recent months.

On the other hand, she said, import has increased from South Asia (Bangladesh, India and Pakistan) and Turkey.

On Denmark and Poland, she said fiscal data showed local RMG export to these markets has seen 19.42-per cent and 11.05-per cent growth in FYs '20 and '21 (Jul-Dec) respectively.

But looking at the calendar year data (2019 and 2020), the BGMEA leader said, it altered the result.

In a year-on-year analysis, export to Denmark and Poland in 2020 decreased by 0.51 per cent and 9.53 per cent correspondingly.

For the first six months' data (January-June), export to Denmark and Poland have seen negative growth of 20.89 per cent and 27.28 respectively.

"It implies that perhaps in the later part of the year, our suppliers have sent the shipments that were deferred due to the first wave of Covid-19 which resulted in the export growth," Dr Huq noted.

Regarding Hungary, she said both fiscal year and calendar year data shows a positive trend, although of very limited magnitude, to date.

Such a sudden surge in export can happen sometimes for reasons like promotional offers, festival orders or in some exceptional cases, Dr Huq added.

Apparel export to Bangladesh's largest destination, the USA, fell by 2.65 per cent to $2.90 billion and 2.23 per cent to $487.02 million to Canada in July-December of this fiscal over that of last fiscal.

This trend was also observed in non-traditional markets like Brazil, Chile, China, India, Japan, Korea, Mexico and Turkey where apparel export dropped by 9.60 per cent to $2.46 billion.

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