The export earnings from the readymade garments (RMG) sector continued to fall as the key export-driver is facing decrease in export order, triggered by ‘economic recession’ around the world, said industry players. Export earnings from the sector fell by 6.21 per cent to USD 16.02 billion in July–December of the 2019–20 fiscal year following lower shipments of apparel items. The earnings had totalled USD 16.08 billion in the corresponding period of the last fiscal year (2018–19), according to the data of the Export Promotion Bureau (EPB). RMG exports fell by 6.21 per cent in July–December of the 2019–20 fiscal year because of instability in international markets and the economic recession in Europe and North America, exporters said. Talking to The Independent, Mahmudul Haque, the chairman of Anlima Textile Ltd, said, “The economic recession is going on around the world. That’s why even our common clients are not placing orders with our buyers as before.” “US-China trade tensions, continuous fluctuations in the world’s stock markets, devaluation of the taka against the US dollar and a rise in production costs against low prices offered by foreign buyers have caused the drop in exports,” he explained. The exporters, however, expressed hope that the quantity of orders would pick up if the ‘Phase One’ trade deal is signed between the world’s two biggest economies—the US and China—which should lead to lower trade tensions. Talking to The Independent, AM Chowdhury Selim, the vice-president of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA), said, “The international economic recession and the rise in the prices of utilities, gas and electricity are responsible for lower production. These have further eroded our competitiveness in the international markets. As a result, the prices in international markets have dropped and export earnings show negative growth. The revised pay structure for the garments sector is also responsible.” “Buyers always search for cheaper and quicker ways to import products. However, exports through Chittagong Port are very time-consuming. As we cannot deliver our products in a timely fashion because of handling problems at the port and the costs of doing business are way higher in our country, buyers switch their interest from us to our competitors, especially India, Vietnam and Pakistan,” Chowdhury added. “We had set a target to earn an amount of USD 50 billion by 2021. But we are apprehensive whether this target would be met as with these obstacles, we cannot produce and export enough goods,” Chowdhury pointed out. When asked about the way forward, Chowdhury told The Independent, “Keeping the overall situation in mind, we ask for policy cooperation, incentives and a quick enforcement of a single-digit interest rate. The devaluation of the taka could affect imports adversely. We want enhanced prices for cost of making (CM).” “As the largest portion of export earnings comes from the RMG sector, the government and all relevant authorities should take effective measures to ensure a sound atmosphere for doing business,” Chowdhury added. According to the EPB, woven products earned USD 7.8 billion in July–December of the fiscal year 2019–20, marking a 7.28 per cent negative growth from the same period in the previous fiscal year, which had been USD 8.42 billion. The knitwear industry earned around USD 8.21 billion during the same time, down by 5.16 per cent from the same period last year, which had been USD 8.65 billion.
