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Bangladesh garment exports may slowdown in FY12

22
Nov '11
Readymade garment (RMG) exports from Bangladesh may witness a slower pace of growth during the current fiscal year up to June 2012 owing to the deepening debt crisis in Europe.

In July-September quarter of 2011, the country's knitwear sector exports totaled US$ 2.57 billion, showing an 18.26 percent growth over the corresponding quarter of previous fiscal, as per the data of Export Promotion Bureau (EPB).

Similarly, woven garment exports were worth US$ 2.23 billion during the three-month period, registering a year-on-year rise of 24.82 percent, which is 1.12 percent lower than the target finalized for the period.

However, the pace of growth slowed down in September 2011. This can be seen from the fact that in July-August, the earnings of woven garment and knitwear sectors increased by 33.54 and 29.64 percent respectively.

In comparison, the country's RMG exports fetched US$ 17.90 billion in 2010-11, 43 percent higher than the previous fiscal.

The European debt crisis is expected to have a negative impact and the country's RMG exports may decline further in the coming months.

“Actually, the world market is seeing a downward trend. About 50-60 percent of our goods are exported to EU, where a lot of companies are going through economic crisis. So, due to this the garment exports are little low, but not very low,” Mr. Siddiqur Rahman, Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told fibre2fashion.

Prof. Mustafizur Rahman, Executive Director of the Centre for Policy Dialogue (CPD) agrees, “Europe being our major export zone the situation there affects our exports, particularly knitwear.”

Providing additional reasons, he says, “Last year, our garments export growth rate was over 40 percent. So, another 40 percent growth rate over and above that growth is, of course, very difficult to achieve. Secondly, the price of cotton and yarn has come down significantly by about 50 percent compared to last year. This has led to decline in prices of fabrics and apparel at the retail-end. Hence, the growth rate will definitely come down in terms of dollars, but not in terms of volume.”

“Overall, I do not expect the RMG exports to repeat the last year's growth rate of 40 percent, but it should be around 20 percent this year,” he adds.

Mr. Rahman, however, is very optimistic and quips, “We expect the market to pick up once again next year and the growth will be as it was last year.”

Fibre2fashion News Desk - India


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