Bangladesh’s apparel exports to European Union (EU) is facing a new challenge as an impact of depreciation of almost all major currencies, including EURO, against mighty US dollar in recent months.Industry insiders say local apparel exporters see the exchange rate devaluation of EURO and other currencies against US dollar as a major challenge to achieving export target to EU region, which is the biggest market of readymade garments from Bangladesh.In a reverse development, Bangla-desh’s local currency known as taka maintains a relatively stable position against US dollar for over the last couple of years.An analysis of Bangla-desh Garment Manufacturers and Exporters Association (BGMEA) shows that EURO fell 23.74 percent in the first week of February against US dollar. Meanwhile, taka fell only 0.18 percent. In recent months, almost all the major currencies have become weakened against US dollar amid a strong recovery in US economy backed by significant job creation in the country. A depreciation trend is observed in few other currencies like Canadian dollar and Russian Rouble.BGMEA senior vice-president Faruque Hassan said, “The currency devaluation in most of our competitor countries as well as major markets remains as a major challenge for us. While most of the currencies in the world have depreciated significantly in recent years against US dollar, Bangladeshi taka remains relatively stable which is hurting our export industries. Especially the fall of Euro value against US dollar is a major concern for our industry, as Europe is the largest market of our apparel.”He said local manufacturers have called upon respective buyers to enhance slightly the unit price of apparel goods produced in Bangladesh to cover the challenges. “Depreciation of our competitors’ currencies puts extra pressure on us. We hope our customers would be more rational about their pricing policy,” he said.He said local apparel manufacturers have been improving their capacity to ensure safe workplace and productivity by modernising factories and become environment friendly to produce quality products. “Customers should consider the efforts,” he added.In EU region, Bangladesh’s apparel exports were around 92.6 percent of total exports worth $12.335 billion in 2014. A minor portion of total export income comes from frozen fish, agriculture outputs, footwear and raw hide. And, import from EU region was worth of $2.017 billion, according to data available from the Office of the Director General for Trade of EU.Bangladesh normally imports machinery, appliance, chemical and allied products from Europe.While explaining the development of exchange rates movement, Bangladesh Bank’s chief economist Biru Paksha Paul said the stable position of taka-US dollar exchange rate is determined by the market.“It may slightly hurt exporters but it is, on the reverse hand, benefiting importers,” he said.“It is a demand-supply market. If the demand for US dollar is enhanced, taka will ultimately lose its strength and it will need to raise import. And, higher import comes from higher investment. So, we should raise our investment,” he added.In WTO ranking, Bangladesh is the second largest apparel exporting country. China ranked top while European countries all together ranked after China. In the fiscal year which ended on June 30 last year, Bangladesh’s income from apparel export was $27.31 billion. In the previous fiscal year 2014, Bangladesh’s total income from readymade garment exports was $24.58 billion.The country’s total export income was $31.2 billion in 2014-15 while the target for the current fiscal (2015-16) was set at $33.5 billion.
