RMG faces export order crisis
The country's export, which saw a record growth in the last fiscal, seems to suffer a significant fall as the key export-driver RMG sector is facing decrease in export order, triggered by "economic worries" in the European Union and the USA.
The RMG (readymade garment) export order dropped by 20-30 percent in recent months with most of the factories remaining idle or near idle due to declining work orders.
According to RMG factory owners, further growth in the export sector is apparently impossible while it will be difficult to maintain the growth seen in the last fiscal.
“The downtrend in export order may shrink further in the coming months. But we hope something better by November depending on the recovery of European Union and US economies”, BGMEA President Shafiul Islam Mohiuddin told the news agency over phone yesterday.
He said they are working to figure out the exact percentage of the decline in export order. “Roughly, we think, the export order slumps by 20-30 percent.”
Mohiuddin, also managing director of Onus Garments Ltd, said the pace of infrastructure development should get a momentum to help survive the RMG sector in the competitive global market. “We'll have to reduce the cost of production to survive”, he said.
Abdus Salam Murshedy, president of Exporters' Association of Bangladesh (EAB) and former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), also sees bad times for the export sector in the coming days.
“Export order has significantly slowed down in recent months. In the last two months, the order declined sharply. Most of the factories are sitting idle”, he told the agency.
“The sale of RMG products sharply declined in the European Union and the USA. I predict a 'shaken recession' in the coming days”, he said.
Replying to a question, Murshedy said, “It'll be really tough to maintain the growth of the last fiscal…forget about further growth since the world market is shrinking”.
He said uninterrupted supply of gas and electricity would have to be ensured for the survival of the sector. “[Increased prices of] diesel and furnace oil will raise the cost of production.”
Murshedy observed that the development of Mongla Port is very slow. “Since imports and exports are gradually increasing, the efficiency of Chittagong Port will have to be enhanced”.
The government has set a new export target of US$ 26.37 billion for the current fiscal (2011-2012), a 15 percent rise compared to that of a year ago.
Bangladesh exported goods worth $22.93 billion in fiscal 2010-11, registering a 41.47 percent growth, according to the Export Promotion Bureau.
The export earnings surpassed the yearly target of $18.5 billion, buoyed by shipments of RMG and jute and jute goods. In fiscal 2009-10, Bangladesh exported goods worth $16.20 billion.
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