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RMG export to major destinations witnesses negative growth in Q1

MONIRA MUNNI | Published: October 22, 2019 10:02:57 | Updated: October 23, 2019 13:39:01


— FE file photo

The country's readymade garment (RMG) export to major destinations including European Union, Canada and some other non-traditional markets witnessed negative growth during the first quarter (Q1) of the current fiscal year (FY 2019-20).

However, the export to the United States of America during the July-September period witnessed a meager growth of less than 1.0 per cent, according to data.

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.

Bangladesh's RMG export to Belgium, Germany, Italy and Spain witnessed negative growth of 1.12 per cent, 7.37 per cent, 11.80 per cent and 2.08 per cent respectively during the period, according to Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

On the other hand, apparel shipments to major EU countries like Denmark, France and the Netherlands maintained sluggish growth of less than 2.0 per cent while exports to UK and Poland grew by 5.76 per cent and 16.25 per cent respectively, according to data.

Bangladesh fetched US$ 4.94 billion from apparel exports to EU, marking a 3.21 per cent negative growth compared to the earnings of $ 5.11 billion in the corresponding period of last FY. About 61.43 per cent of the total RMG exports ($ 8.05 billion) shipped to EU during the period.

US imports of apparel items from Bangladesh during the first quarter grew by 0.46 per cent to $ 1.49 billion. US accounted for 18.50 per cent of the country's total apparel exports.

The country fetched $ 255.22 million from garment exports to Canada which is 1.55 per cent lower than the shipment of the corresponding period of last fiscal.

When asked, BGMEA president Dr Rubana Huq said the number of work orders had declined followed by global impacts like falling consumption, China and US trade tension, and devalued currencies in major competitor countries.

The country is facing tough competition with Vietnam and Vietnam is getting a fair share of orders, she noted.

Echoing the BGMEA president, managing director of Rising Group Mahmud Hasan Khan said the consumers are purchasing less amid fears of possible recession in the EU countries and due to Brexit.

"Bangladesh is also becoming less competitive mainly because of devalued currencies in our competitor countries," he added.

Besides, RMG exports to major non-traditional potential markets also decreased during the period.

Exports to Australia, Brazil, Chile, China, South Africa and Turkey declined by 1.83 per cent, 26.07 per cent, 5.30 per cent, 1.65 per cent, 10.82 per cent and 39.87 per cent respectively in July-September period of the current fiscal year.

Exports to India, Japan, Korea, Mexico, Russia, however, witnessed growth ranging from 3.58 per cent to 35.54 per cent.

Talking to the FE, Sayeed Ahmad Chowdhury, general manager operation of Square Textile Ltd., said that in the recent months, buyers have hold placing their orders followed by a declining trend of price of raw materials, especially cotton and yarn.

As a result, the flow of orders declined in last few months, he added.

munni_fe@yahoo.com

 

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