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Industry News | Time: Nov 22 2019 2:24PM
Readymade garment exports to new markets fall
 
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The country's readymade garment (RMG) export to the non-traditional markets witnessed a negative growth during the month of July-October of the current Fiscal Year (FY2019-20) due to trade tension between China and US, declining price trend of raw materials, especially cotton and yarn, said industry experts.

Garment shipments to non-traditional major markets have registered a negative growth of 6.07 per cent year-on-year to $1281.84 million in month of (July-October) of the current fiscal year compare to the same period of the previous year 2018-19 which was $1364.66, according to Export Promotion Bureau (EPB). Rather than traditional markets such as-- US, Canada, and EuroThe apparel makers did not want to go to those markets because it takes a lot of hassle and time to enter a new market and a businessperson needs to talk to different people, make their own research and gradually penetrate into the market, Siddiqur Rahman, former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told The Independent.

Rahman said when a manufacturer enters a new market he or she needs to lower the product price rather than average. Manufacturers didn’t want to explore the market but since the government is kind enough to provide cash incentive for long period of time, garment owners have started to explore the new destinations and markets.

“However, the number of work orders had declined followed by China and US trade tension, global impacts like falling consumption, and devalued currencies in major competitor countries, he added.

Source: the independent
When asked, he said that the cash incentive is 4 per cent which was set from last year (2018) at this moment.

“Presently, non-traditional markets are contributing 15-16 per cent of total export earnings,” he informed.     

July-October of 2019-20 financial year, Bangladesh earned $138.71 million from China with negative growth 18.80 per cent growth from $170.82 million in the same period of financial year 2018-19, according to Export Promotion Bureau (EPB).  

China, the largest apparel supplier of the world, has started importing products from us because the government of China has allowed duty-free access to over 5,000 Bangladeshi products. There are 40 to 50 crore people live in China obtains high-middle income group, said Siddiqur.  

July-October of 2019-20 financial year, Bangladesh earned $210.57 million from India with growth 12.40 per cent growth from $187.34 million in the same period of financial year 2018-19, according to Export Promotion Bureau (EPB).

Former Senior Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Faruque Hassan explained a couple of reasons and said “Famous international retail brands such as Zara and H and M have established their business in India and we are the biggest supplier for them.”    

“Another reason is that Indian domestic market has grown and the numbers of fashion conscious consumers have increased. We import Ready-made garments (RMG) raw materials such as- cotton, machinery from India, so there export is also increasing. It is a win-win situation for both countries,” he said.

July-October of 2019-20 financial year, Bangladesh earned $38.29 million from Chile with negative growth 0.83 per cent growth from $38.61 million in the same period of financial year 2018-19, according to Export Promotion Bureau (EPB).pe, others are considered as non-traditional markets.

Among them, Chile, China, Japan, India, Australia, Brazil, Mexico, Turkey, South-Africa, Russia are the markets where Bangladeshi apparel exports showed negative growth in month of (July-October) of the current fiscal year 2019-20.    

Apparel exporters attributed to a number of factors including sluggish EU economy, the trade tension between China and US and recent declining price trend of raw materials, especially cotton and yarn, for the poor performance of the RMG exports.

[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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