Published in Dhaka Tribune on Monday, 8 September 2014.
RMG export to US faces setback
Ibrahim Hossain Ovi
It falls 9% during July-August after compliance issues hit the country’s biggest industry
RMG exports to US market have seen an 8.8% decline to $831 million in the first two months of current fiscal.
A set of compliance issues and lack of proper infrastructure are attributed to the failure in grabbing enough orders from the United States buyers.
According to the Export Promotion Bureau data released yesterday, Bangladesh earned only $831 million by exporting apparel products to the US market in July-August period of the current fiscal, which is 8.81% less compared to $911 million earned in the same period of last fiscal.
The woven items has seen 10.46% decline to $604.75 billion compared to 675.42 million in the previous year’s earning. The knitting apparels earnings lost around 4% to $226.37 million against $236 million in the same period of the previous fiscal.
“This is the reflection of low orders from the global buyers especially from the US,” BGMEA Vice-President Shahidullah Azim told the Dhaka Tribune while commenting on the declining trend of woven sector export earnings.
The compliance issues have cast a shadow on the export earning as every day RMG units are being shut, he said, adding that the buyers are disinclined to place new orders in shared buildings housing factories.
According to the Accord and Alliance agreement, the buyers may not pull out their orders till the factories are relocated.
A BGMEA data said a total of 209 factories had been shut since the deadliest collapse of Rana Plaza last year.
“RMG exports to the US market have declined as our competitors Vietnam, Cambodia, Pakistan and India have gained the ability to develop infrastructure, productivity and price competitiveness that lured American buyers,” Mustafizur Rahman, executive director, Centre for Policy Dialogue told the Dhaka Tribune.
Bangladesh fails to grab the orders coming from china due to lack of proper infrastructure, lead time and increasing cost, which were reasons behind the downward trend in export earnings, said Rahman.
He added that some buyers are disinterested in placing orders after the Rana Plaza collapse.
“The US buyers are now in wait-and-see mood as they are observing the inspection report on the RMG sector in Bangladesh, thus abstaining from putting orders,” said Bangladesh Knitwear Manufacturers and Exporters Association first Vice-President Mohammad Hatem.
He adds that the downward trend could be beaten as soon as the probe gets completed that would help buyers gain confidence in safety issues.
However, the total RMG exports to the world market in July-August period have seen 1.72% growth to $4.23 billion, which was $4.16 billion in the same period last year.