The export of woven garments to the US registered a negative growth in the first 10 months of the current financial year though the export earnings from the market started to rebound from the beginning of this calendar year. Exporters and analysts said there were various reasons for the negative growth that included decreasing demand for the items on compliance issue, reluctance of exporters for high duty in the market and grabbing market share by the competing countries. The export of woven garments to the US market in the July-April period of the FY 2014-15 decreased by 1.62 per cent to $3.18 billion from $3.23 billion in the same period of the FY 2013-14, according to Export Promotion Bureau data. The export of knitwear to the market, however, grew by 5.85 per cent to $1.03 billion in the period. Following the Rana Plaza building collapse a number of US buyers shifted orders from Bangladesh and good number of buyers decreased their volume of orders due to safety concern, Bangladesh Garment Manufacturers and Exporters Association vice-president Shahidullah Azim told New Age. ‘At the same time, some of our competing countries like Vietnam and India gained their capacities in the market and Bangladesh lost its space,’ he said. On the other hand, a number of exporters were looking for the alternative markets in the period and expressed their unwillingness to export to the US market due to higher duty, Azim said. A recent report launched by the Centre for Policy Dialogue stated that in the first 10 months of the FY15, the growth of export earnings was only 2.6 per cent and such performance was realised amid a number of challenges the export sector faced that included a violent and uncertain political environment, uneven developments in major export destination, falling global commodity prices and the volatile exchange rate of the euro. The report said that the export of woven garments was shifting from the US market to the EU market in recent years. During the first 10 months of the FY15, the export of woven products to the United States declined by 1.6 per cent, while a relatively strong growth rate of 7 per cent was attained in the EU market, the report said. The CPD, a local think-tank, said that this was perhaps a sign that the woven exporters in Bangladesh were gradually diverting products from the US market to the EU market due to the relaxation of the rules of origin requirement in the generalised system of preferences. Since the relaxation of the rules of origin the export of woven products has been on the rise to the European Union market. The report mentioned that the US imposed high customs duty on imports of woven products and the US government charged customs duty of $392 million on imports of woven products from Bangladesh in 2014. Abdus Salam Murshedy, president of the Exporters Association of Bangladesh, said that Bangladesh had been facing many type of challenges including compliance, deprecation of the euro, appreciation of the local currency and rising cost for doing business. These things have put pressure on the efficiency of the country’s readymade garment sector and competitor countries have grabbed the market share, he said. Salam said, ‘The key problem for the garment sector is that our competitive edge is doing down.’ According to the CPD statistic, to some extent Vietnam, India, Honduras and El Salvador registered higher growth in exporting woven products to the US in the first 10 months of the FY15. Bangladesh’s export earnings from mens/boys shirts in the July-April period of the FY15 registered 6 per cent growth while Vietnam registered 13 per cent growth. In exporting boys’ trousers and shorts of synthetic fibres, Bangladesh posted 9.40 per cent negative growth while Vietnam registered 5.4 per cent, Honduras 18.80 per cent and El Salvador 33.30 per cent growth.
