No sign of early recovery
The RMG sector, which contributes about 75 per cent to the country’s export earnings, has been hard hit by global recession with a considerable fall in orders across the world. According to experts, the situation is not likely to improve in near future. Recently, the export orders have declined by more than 20 per cent.
Apparel manufacturers and exporters said that shipment orders for ready made garments are declining fast.
Exporters told The Independent that buying orders in the knit and woven sector have decreased substantially. This is likely to leave the sector high and dry, they added.
Some knitwear factories in Narayanganj were shut down last week. Work in most factories have reduced by 20-30 per cent.
“Over the last 20 years, I always run my factories with overtime. Last year, I rented 15 factories to supply products. This year, however, only five of the factories are running without any overtime,” said Mohammad Hatem, vice-president of BKMEA, the apex body of knitwear industries.
Abdus Salam Murshedy, former president of BGMEA (Bangladesh Knitwear Manufacturers and Exporters Association) and managing director of Envoy Group, also expressed grave concerns over the RMG situation.
According to sources, the export sector of Bangladesh has started experiencing the negative impact of global recession from the middle of last fiscal. “Economic recession in the United States, Greece, Italy and other European countries does not bode well for the future,” said Murshedy.
Murshedy, also president of Exporters Association of Bangladesh, said that about 85 per cent of the country’s RMG exports goes to the European and American markets, which are reeling with recession.
Decreasing prices in the international market, coupled with the rising cost of production, is creating a deadlock in the RMG sector. Lack of proper infrastructure, shortage of power and energy, high bank interest rates are affecting the sector, he added.
He urged the government to immediately resolve the problems.
Siddiqur Rahman, vice president of BKMEA, said that export orders have significantly reduced this year. Prices are decreasing slowly, and the overall situation is deteriorating, due to the global recession, he observed.
According to EPB, the growth of knitwear and woven garments exports in the last fiscal declined by about 46 per cent and 26 per cent, respectively, as compared to those in previous fiscal years. Earnings from knitwear products stood at USD 9.486 billion in the last fiscal year, as against the target of USD 10.800 billion.
The country, however, fetched USD 9.603 billion by exporting woven cloths in last fiscal year, as against its target of USD 9.559 billion, marking a growth of 0.45 per cent. The growth is significantly less than the previous fiscal years, where it was 40.23 per cent.
Courtesy of The Independent
