BD apparel export declining due to unplanned manufacturing
Global consumers have been decreasing their purchase and going for more durable products, whereas Bangladeshi manufacturers expanded their capacity without any study on global consumption trends. So that, unplanned manufacturing is contributing to the recent decline of apparel export from Bangladesh.
Bangladesh is losing competitiveness in the global apparel trade due to a lack of efficiency and productivity of the workforce in the RMG sector. Bangladesh has also issues of longer lead time and a lack of negotiation skills.
Industrialists are thinking that the sector will see negative growth in the coming months also. At the end of this financial year, if the exports do not turn away from this downward trend, Bangladesh may lose its second position in the global apparel market.
According to the Export Promotion Bureau (EPB) data published on 7 November, earnings from RMG export performance (Goods) for FY 2019-20 July-October fell by 6.67% to $10.57 billion from $11.33 billion in the same period of FY19.
Earning from woven garments fell by 7.67% to $5.03 billion in July-October of FY20 from $5.45 billion in the same period of last fiscal year. On the other hand, knitwear export fell by 5.73% to 5.53 billion from 5.87 billion.
Siddiqur Rahman, former President of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA), said, “China and US trade tensions, global effects such as rising consumption and the decline of work orders in major rival countries have reduced the number of work orders.”
Asif Ibrahim, Founder Chairman, Business Initiative Leading Development (BUILD) and Director, BGMEA, told Textile Today, “The released country export data of October 2019 is very alarming and showing negative growth of 6.67 percent.”
“China and US trade tensions, global effects such as rising consumption and the decline of work orders in major rival countries have reduced the number of work orders.”
“The industry leaders and leading think tanks in recent years have highlighted that the strong value of taka against the US dollar is one of the key contributors of eroding the competitiveness of Bangladeshi exporters.”
“The countries who compete with Bangladesh not only devalued their currency significantly but they also provided both fiscal and non-fiscal incentives to their exporters for boosting the country competitiveness in the international open market,” he added.
According to Asif Ibrahim, “It’s time that the government takes this matter very seriously, nullifies the notion that exists among certain policymakers that export sector enjoys many benefits and provide immediate relief to the exporters through short- and medium-term stimulus packages. If this negative trend in export continues it is going to have a severely detrimental impact on Bangladesh’s economy.”
Other than apparel product the export earnings from leather and leather goods in July-October of FY20 fell by 8.2% to $316.9 million from $345.2 million in the same period of last fiscal year.
Export earnings from leather-footwear in the first quarter decreased by 12.11% to $189.98 million from $2.16.16 million while other leather products fetched $84.19 million with a 16.46% growth in the period.
Earnings from the home textile export in July-October of FY20 fell by 11.12% to $239.59 million from $269.57 million in the same period of FY19.
Of all the negative scenario there are also some good news that Bangladesh can take them as an opportunity to grow in the global market. Recently Bangladesh’s denim products exports to the United States of America rose by 5.42% to $573.27 million during the January-August period of 2019.
Bangladesh’s overall merchandise export earnings have registered a 10.55% growth to $40.53 billion in the just-concluded fiscal year, riding mainly on apparel exports, according to the provisional data of Export Promotion Bureau (EPB). Of them, export to China contributed $506.51 million.
Exports to India, Japan, Korea, Mexico, Russia, however, witnessed a growth ranging from 3.58% to 35.54%. Bangladesh earned $163.12 million from India with growth 12.42% growth than the previous year.
The export of jute and jute goods increased by 8.88% to $314.49 million from $288.85 million.