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The Financial Express

Bangladesh exports to non-traditional market shrink

| Updated: October 14, 2020 15:44:24


File photo (Collected) File photo (Collected)

The country's apparel exports to the non-traditional markets are still facing hurdles.

Shipments to those destinations maintained negative growth during the first quarter (Q1) of the current fiscal year (FY), industry people said.

Readymade garment (RMG) shipments to the traditional markets like the USA, EU and Canada, however, started regaining lost ground gradually during July-September period of FY 2020-21, data showed.

According to industry people, Australia, Brazil, Chile, China, India, Japan, Korea, Mexico, Russia, South Africa and Turkey are the 11 prospective markets beyond the three traditional export destinations, namely, the USA, European Union and Canada.

Exports of both knit and woven items to the non-traditional destinations declined by 8.33 per cent to US$ 1.24 billion in Q1 as compared to $1.36 billion in the corresponding period of the last FY, according to Export Promotion Bureau (EPB) data.

Exports to Brazil, Chile, China, India, Japan and Mexico declined by 26.88 per cent, 18.37 per cent, 34.35 per cent, 43.50 per cent, 10.93 per cent and 25.72 per cent respectively in the July-September period.

Exports to Australia, Korea, Russia, South Africa and Turkey, however, increased by 8.28 per cent, 9.22 per cent, 41.69 per cent, 4.19 per cent and 47.74 per cent respectively during the period.

The RMG shipments to the US witnessed a rise by 5.98 per cent to $ 1.58 billion during the Q1.

EU imported apparel worth $5.02 billion, marking a 1.58 per cent growth, while Canada imported goods worth $270.09 million, recording a 5.83 per cent rise during the first quarter, data showed.

Bangladesh fetched $4.78 billion or 17.10 per cent of the total $27.94 billion RMG exports from the non-traditional markets in the last FY.

Exporters attributed the sluggish global demand for last couple of years to the decline in apparel exports to the non-traditional markets while Covid-19 has worsened the situation further.

They also blamed high duty in some emerging countries especially in Brazil for the decline.

When asked, Dr Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said diversification of market is a fundamental need for the sector to ensure sustainable growth since over concentration on a few products and markets is not healthy for an industry or economy.

"The COVID pandemic and the global recession have reminded us this fact again and again."

Citing data, she said RMG exports were worst-affected in non- traditional markets and added that in this time of pandemic, the USA and EU have apparently been the sources of growth and recovery.

However, non-traditional markets are never of least importance considering the long-term growth perspective, Ms Huq said, adding that it is feared that non-traditional markets in Asia, South America and other parts of the world including Russia are among the worst-affected by the Covid which has disrupted the retail as well as sourcing.

"This has particularly threatened our progress in the emerging markets," she said, stressing on the need for special policy supports to regain their foothold in those markets.

Fazlee Shamim Ehsan, director of Bangladesh Knitwear Manufacturers and Exporters Association, said exports increased in traditional markets because the Covid-induced cancelled or suspended orders were now being shipped.

There was not such high volume of cancelled orders in non-traditional destinations like the US or EU, he said adding so there was no reinstatement of orders there.

Besides, consumers of traditional markets started spending especially online with slow recovery of their economies while purchasing capacity is not the same in the non-traditional markets, he explained.

Moreover, the long winter season is another reason for traditional markets, Mr Ehsan said, adding they are getting new orders for knit items for winter season.

Mansoor Ahmed, managing director of Mother Color Ltd., however, expressed the hope that knitwear exports in coming months will see a further rise.

Mr Ahmed, also director of BKMEA, said his company which is exporting to China is getting fresh queries.

"Negotiations are going on for three orders worth 0.3 million, 0.5 million and 0.7 million pieces for knit items," he said.

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