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Bangladesh RMG export fall in July 2016, not an impact of Gulshan Attack

Export driven Bangladeshi readymade garment sector has got a setback at the first month of the financial year 2016-17. After having 10 percent growth in the last financial year, July 2016 export fall short of its target by 23.6 percent as per the information of export promotion bureau of the country. RMG shipment in July was 2.11 billion USD when the target was 2.77 billion. It was 4.41 percent less than the previous year’s July export.

Many around the sector would think that this would be the aftermath of the recent terror attack in a restaurant in Gulshan, Dhaka. But industry insiders have explained it as an effect of long holidays in the month. As mentioned by Siddiqur Rahman, president of the Bangladesh Garment Manufacturers and Exporters Association, “Garment exports witnessed a slowdown due to long-term holidays for Ramadan and Eid,”. This year government provided 10 days of eid holidays, a record in recent times.

Bangladesh Export FallHowever fear and uncertainties about foreigners visit to Bangladesh has affected order flows to the country. A merchandising manager in a liaison office of an international retail brand informed this reporter that many of their foreigner’s visits have been cancelled or delayed. Many of local factory staffs had to arrange quick unplanned visits to a third location to discuss business deals.

Many hotels and restaurants in Gulshan area are going empty or almost empty through one and half months of 1st July attack in the restaurant called Holy Artisan. Number of foreigners who were engaged with textile and clothing industry immediately left the country after the attack. Many of them are being late in coming back. This has caused some impact in order movement. Order submission has been delayed in most cases. A dyehouse insider mentioned that this year’s July and August are of fewer orders than his previous year. None of these is pictured in July export figure. The immediate impact on export of the Gulshan attack will be known within next one or two months.

Meanwhile the export performance of the country in the fiscal year 2015-16 has encouraged all the industry insiders. Now the industry is more confident in overcoming any challenge. A factory owner mentioned that it is indeed the resilience of the entrepreneurs and the hard work and sincerity of the staffs and workers who can overcome any challenge the sector face.

Table 1 shows that total textile and clothing export in FY 2015-16 was almost 32 billion USD, which was almost 9 percent higher than the FY 2014-15. RMG export was USD 28.1 billion in FY 2015-16.

 

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