Published in The Financial Express on Tuesday, 16 September 2014.
RMG exports to US fall by 1.75pc
Vietnam, India gain
Monira Munni
Exports of Bangladesh’s readymade garments (RMG) to the US fell by 1.75 per cent to $2.94 billion during the first seven months of 2014 compared to the same period of last year, according to the data of the US Department of Commerce.
On the other hand, apparel exports to the US by Vietnam, one of the main competitors of Bangladesh and India grew by 13.75 and 5.76 per cent respectively during the period.
Exporters attributed the tragic industrial incidents including the Rana Plaza building collapse and Tazreen fire and political turmoil to the declining trend in the US market.
Following the political turmoil last year, a large number of orders were shifted to Vietnam and India, they added.
During January-July period of the current calendar year, the readymade garment export of Vietnam to the US market stood at $5.17 billion from $4.54 billion in the same period of last year, according to the US Commerce Department data.
India fetched $2.12 billion during the period which was $2.0 billion during the same period of last year.
China’s export to US fell by 0.29 per cent to $15.63 billion during January to July of 2014.
Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) said US buyers are little bit worried and are in a wait-and-watch situation mainly due to the recent confrontational political activities, Rana Plaza incident and the compliance and safety issues.
“They are now more cautious and are shifting the orders to safer countries,” he said adding that orders have been shifted to Vietnam and India during October-January period following political turmoil in the country.
Dr Khondaker Golam Moazzem, Additional Research Director of the Centre for Policy Dialogue (CPD), said the US demand is declining compared to its economic recovery.
On the other hand, Bangladeshi currency Taka is appreciating against US dollar while the competitor countries’ currencies especially of Vietnam and India are depreciating, making imports from Bangladesh costlier, he added.
Moreover, international buyers are waiting for completion of reforms of the local garment sector, he said adding problems have been identified while the remediation part is yet to start.
In 2013, Bangladesh’s apparel exports to the US market stood at $4.94 billion which was $4.46 billion in 2012.
Vietnam’s export to the US was $8.12 billion against $7.10 billion in 2012. India exported apparel products worth $3.21 billion which was $3.04 billion in 2012, according to the US Commerce Department data.