Published in Bangladesh Post on Saturday, 21 April 2018
RMG exports to new markets need boost
Ahmed Shahin
The country’s Readymade Garment (RMG) exports to the non-traditional markets are now sluggish amidst a thriving export rise in this sector.
There are some 25 countries besides the EU territory, the USA and Canada that are considered non-traditional destinations for the country’s RMG exports. Of them 11 countries including China, India, Turkey, Japan, and Russia are considered new destinations.
Despite having some promising destinations the exports to these countries have been in a constant mode over the recent few years.
Bangladesh Garment Manufacturers and Exporters’ Association (BGMEA) data shows, exports to non-traditional markets during the first nine months of the current fiscal fetched 3.45 billion dollars, 15.14 percent of the total RMG exports.
The amount earned during the same period the previous year was 15.39 percent of the total export earnings. The total RMG earnings July-March period of the current fiscal fetched 22.8 billion dollars, 9.1 percent up in comparison with that in the same period last fiscal. But export growth to non-traditional markets during this tenure was 7.3 percent up in comparison to that in the corresponding period of last year.
Dr Khondaker Golam Moazzem, research director of Centre for Policy Dialogue (CPD) told Bangladesh Post: “Most of the countries, excluding traditional export territories buying Bangladeshi GMG goods, have witnessed slow GDP growths in recent times. Besides, due to the strong position of Dollar against the currencies of those countries, they reduced their import expenditures causing negative consequences for exports to these regions.”
He also hoped the exports to new destinations will increase further because the government is providing incentives to expedite exports to these countries aiming to diversify RMG exports.
The export figure from the non-traditional markets in the fiscal 2016-17 was 4.24 billion dollars, 15.09 percent of 28.1 billion dollars, the total RMG export.
The export earnings from these destinations were consecutively 15.37 percent in 2015-16 fiscal, and 15.33 percent in fiscal 2014-15.
There are some countries in this territory like China, Australia, Turkey, and Japan, thought to be potential export zones, but the country has failed to increase the expected level of exports to these destinations.
Besides, exports to China and Turkey marked consecutive declines of 5.65 percent and 39.15 percent respectively during the June-March period of the current fiscal.
However, exports to India registered a 110 percent rise during the first nine months of the current fiscal in comparison to that in the corresponding period last fiscal, bringing smiles to the country’s exporters’ faces.
A total of 204 million dollars was earned from India during this period by exporting RMG goods. The export figure was 97 million dollars during the same period in the 2016-17 fiscal.
BGMEA president Siddiqur Raman told Bangladesh Post, they are enjoying duty free facilities to export RMG goods to India, but there were some mistrusts between the businesses of the two countries which have been removed.
“Now some Indian Brands like TATA and Alliance are buying Bangladeshi RMG goods causing higher export growth as well as traders’ confidence,” he said.
However, the exports to EU have been increasing consistently over the past two years. The country earned a total of 14.7 billion dollars through export of RMG goods to 28 countries under the EU, during the first nine months of the current fiscal, which is 11.6 percent higher in comparison with that in the corresponding period last year. The amount is 64.5 percent of the total RMG exports of the country.
The export amount was 13.2 billion dollars during the same period in fiscal 2016-17. The export figures to EU in 2016-17 and 2015-16 fiscal were 17.7 billion dollars and 17.1 billion dollars respectively.
The RMG exports to the USA saw a sharp decline in the last fiscal that also continued in the first quarter of the current fiscal. But exports were revived during the second quarter that has increased the overall growth in the July-March period of the current fiscal.
A total of 3.9 billion dollars was earned from the USA during the first nine months of the current fiscal, 2.38 percent up in comparison to that in the same period last fiscal. “The overall RMG export growth is now at a satisfactory level, but we are taking up policies to boost exports to potential new regions aiming to make the the country’s leading industry thrive further,” Siddiqur Rahman said.