Capital machinery import for the garment and textile industry has declined in the first quarter of the current fiscal year due to financial sectors uncertainty and liquidity crisis.
According to Bangladesh Bank (BB) data, in July-September period of the current fiscal year, Bangladesh’s garment machinery import has seen a 9.53% fall to $698 million, which was $771 million in the same period a year ago.
Meanwhile, import of textile machinery also went down by 1% to $698.41 million, which was $705.44 million in the same period last year.
|Table: Bangladesh’s garment and textile machinery imports have seen fall in FY 19.|
|Imported item||July-September period of FY 18||July-September period of FY 19||Fall (%)|
|Garment machinery||$771 million||$698 million||9.53%|
|Textile machinery||$705.44 million||$698.41 million||1%|
However, total import of capital machinery in the first quarter of the current fiscal year moved up by 14.50% to $6.82 billion comparing $6 billion in the same period in 2017.
Talking to Textile Today, trade analyst and apparel sector people blamed the election for the downtrend in the import of capital machinery for the garment and textile sector as investors are seeing a bumpy situation in the banking sector, also the political transition in making an investment decision.
The country’s textile sector is going through a dull time in terms of new investment as the investors are not getting the connection of gas and electricity.
“The country’s textile sector is going through a dull time in terms of new investment as the investors are not getting the connection of gas and electricity. While setting up a textile mill is too expensive but the fund is not available,” Khorshed Alam, a Director of Bangladesh Textile Mills Association (BTMA) told the Textile Today.
As a result, the import of textile machinery fall in recent time but the sector will rebound soon if the gas and electricity connection is available, he added.
“Usually, there is uncertainty ahead of the national election over the transition of power, which made the investors cautious in opening new Letter of Credit (LC) to import machinery,” Ahsan H Mansur, executive director of Policy Research Institute (PRI) told the Textile Today.
As a result, the import of capital machinery for the country’s apparel and textile industry witnessed a decline, said the economist.
I think, the downtrend of import will not continue as after the election investors will move for new investment, said Ahsan.