Exports of readymade garment products may face a fresh blow due to the spreading of a new coronavirus variant, Omicron, in the export destinations, apparel makers said.
They said that whether the upward trend the country had been enjoying in recent months would continue or not would depend on the impact of the latest variant.
According to Bangladesh Bank data, the net export of RMG rebounded in the July-September period of the fiscal year 2021-2022 amid the restoration by global buyers of work orders which were suspended or canceled by them after the Covid outbreak.
The central bank data showed that the net apparel export rebounded to $4.84 billion in the July-September quarter of FY22 as the country’s gross RMG export rose to $9.06 billion against the import of raw materials worth $4.22 billion.
RMG businesses said that the restoration of economic activities in the country’s major export destinations also helped get more work orders in recent months.
The net export was 15.98 percent or $666.66 million higher than the $4.17 billion net export in the previous quarter.
Besides, the net RMG export in the July-September quarter in FY22 was 8.35 percent or $441.05 million lower than the $5.28 billion in exports in the same quarter of FY21.
Bangladesh Knitwear Manufacturers and Exporters Association executive president Mohammad Hatem told New Age on December 2 that the net RMG export rebounded as the flow of work orders had increased gradually.
‘There is a possibility that the net export trend would remain the same in the next quarter if Omicron does not force to impose any further restrictions,’ he said.
The outbreak of coronavirus has devastated the world economies, including that of Bangladesh, with the country’s net export of RMG, the main export item, dropping to $1.55 billion in the April-June quarter of FY20 from $4.65 billion in the previous quarter.
Bangladesh’s net RMG export reached a record high of $5.85 in the October-December quarter of FY19.
In the July-September quarter of FY22, RMG export accounts for 82.19 percent of the country’s total export of $11.02 billion.
Of the total $9.06 billion in RMG export, woven garment export was $3.9 billion and the remaining $5.16 billion came from the knitwear export.
The United States, Germany, the United Kingdom, Spain, France, Italy, Canada, the Netherlands, and Belgium are the country’s major apparel export destinations.
Bangladesh’s RMG export to the US was $1.91 billion in the July-September quarter in 2021 followed by $1.5 billion to Germany, $1.04 billion to the UK, $694 million to Spain, $421 million to France, $309 million to Italy, $315.48
million to the Netherlands, $285.04 million to Canada, and $147.85 million to Belgium.
Following the Covid outbreak, the government initially announced a Tk 5,000-crore stimulus package for the apparel sector for payment of salaries to employees. Later, the size of the package was enhanced to above Tk 10,000 crore.
Besides, the exporters are receiving pre-shipment credit, cash incentive, export development fund, bonded warehouse facility, and back-to-back letter of credit facilities, among other things, to maintain a strong foothold on the global market.
The BB’s quarterly review on the RMG sector said, ‘After the withdrawal of nationwide lockdown, the production and export of RMG have started accelerating gradually.’
To regain the RMG sector in its previous position, various proactive initiatives such as reinstating the canceled orders from international buyers, smooth supply chain of accessories, reducing container fares, raising production capacity of factories, low cost refinance schemes, production of costly diversified products instead of basic and low price products should be taken by the government and the Bangladesh Bank, the BB report said.
