Fall in Euro affects major export-earning sectors

31 May '10

2 min read

The key export-earning sectors of Bangladesh, such as garment and sea food industries, are likely to suffer, owing to adverse effects of the weakening Euro, on their profits. This is a double whammy for those foreign exchange earners, who were dreading to face new challenges resulting from the Greek debt crisis.

Last week, Euro fell to a four-year low of $1.2142 and has dropped to more than 13 percent since the month of January. Pertaining to this, Abdus Salam Murshedy, President of Bangladesh Garments Manufacturers and Exporters' Association (BGMEA) while expressing grief over fluctuations in Euro, said that, the industry will lose its margins, if Euro is converted to dollar or taka.

This plunge in the value of Euro could take its toll on the income of apparel exporters, though garment prices have not increased in the global markets, said Murshedy. Bangladesh shipped over 60 percent of garment products to European Union last year, which is the key export market of the country.

Exports of the country witnessed 6.3 percent elevation to 5.8 billion Euros in the year 2009, as exports of China, India and Vietnam experienced a plunge in 2009. Exports of these three countries slipped to 13.4 percent, 13.9 percent and 9.5 percent, respectively, last year.

Such variations in Euro have caused an exchange valuation loss of over US $240 million in the ongoing month, as per estimates made by the Bangladesh Bank (BB).

Fibre2Fashion News Desk - India

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