DHAKA, Aug 11 Asia Pulse - Export growth of woven garments drastically declined following the abolition of the quota system from the middle of the just-past fiscal year, creating skepticism about the viability of Bangladesh's apparel sector in the post-MFA era.
The growth of woven garment exports has dwindled in four months out of five of the current year till May since the quota umbrella was removed from the world market on January 1 this year, according to the latest statistics from the Export Promotion Bureau (EPB).
Experts in the apparel sector think that the sharp fall in the export growth is the fallout of the expiry of the Multi Fiber Agreement (MFA), and they fear that the challenge of globalization might prove telling on the country's highest foreign currency-earning sector.
Apparel traders, however, observed that the tough days the country is now passing through would not last long. They think that the recently imposed 'quantity restriction' on China to contain the giant would break the existing stalemate in garment-product export.
Woven garment exports from Bangladesh grew 1.70 per cent to nearly US$ 3.6 billion in the last fiscal year, contributing about 41.60 per cent to the total export earnings.
But the sector had recorded an 8.59 per cent export growth in the previous (2003-2004) fiscal year exporting some 90.48 million dozen woven items worth US$ 3,538.07 million to some 108 destinations across the world.
EPB statistics show that woven garment is among the seven categories of export products that recorded growth over the previous year's performance but failed to touch the target wall.
Woven products worth US$3,598.20 million were exported in 2004-2005 FY, some 6.54 per cent down the export target of US$3,850 million.
Earlier, the export earnings had stood at US$ 3,538.07 million in 2003-2004, US$ 3,258.27 million in 2002-2003, US$ 3,124.56 million in 2001-2002 and US$ 3,364.20 million in 2000-2001 fiscal year.
Sources in the EPB said that after the quota was over, the country exported woven garments worth US$ 296.07 million in January 2005 while it was US$ 376.61 million during the same period of the year 2004-a crushing fall of 21.39 per cent on the growth track.
Besides, woven garments fetched US$ 292.92 million in February, US$ 264.55 million in March, US$ 236.57 million in April and US$ 311.97 million in May 2005 while the earning was US$ 222.90 million, US$ 304.12 million, US$ 263.10 million and US$ 316.49 million during the same months of the year 2004.
Asked about the causes of the export crunch, First Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) MA Salam told UNB correspondent Shahadat Hossain Riad that lack of expansion of the production capacity and price reduction in the quota- free era were the main causes of the downturn.
"But the tough times would continue no longer... already the US has imposed 'quantity restriction' on China and the European Union is also contemplating imposing embargo on China. These will be very much positive for Bangladesh," Salam said.
He, however, was critical about government move to raise the minimum wage structure of the laborer (now Tk 930 monthly) at least three times.
"It will be a 'self-killing' campaign for us as our garment industry is fighting for survival," said the leader of the industry owners and exporters.
When contacted, BGMEA President Annisul Huq admitted that export growth on the European market was on the decline.
Huq urged the government to explore methods of market expansion for woven garments in the European countries, failing which, he thinks, the country will face a severe setback in export trade.
"Apart from this, the government should establish central bonded warehouse, SAARC cumulation and regional cumulation to survive in the post-MFA era," the BGMEA chief said, reiterating their longstanding demand, is opposed tooth and nail by the textile-mill owners.
(UNB)
