Robust increase in RMG shipments to 10 new markets

The fiscal year 2009-10 was a critical period for Bangladeshi garment exporters who suffered from the impacts of global recession, struggling to sustain in their major and traditional markets where imports declined or did not grow.

But interestingly, several new markets that opened up in that critical period raised hopes to local exporters, industry analysts said.

A robust increase in shipments to these new these markets helped this major export earning sector to retain at least a small growth in the last fiscal year.

The latest report of the Export Promotion Bureau showed that garment shipments, in terms of value, declined or saw insignificant growths over the year in the major traditional markets.

Shipments to USA, the number one market for Bangladeshi apparels, declined by 1.6 per cent to $3.63 billion and shipments to Germany amounted $2 billion with minus 5.6 per cent growth.

But shipments to UK increased by only 3 per cent to $1.26 billion, France 1.8 per cent to $970 million and to Canada shipments amounted $596 million with only 1.5 per cent growth.

Shipments to Italy amounted worth $541 million with only 3.4 per cent growth but shipments to Spain saw minus 4.6 per cent growth and amounted worth $521 million.

Declined or insignificant growth of exports to major markets mainly pulled down the overall growth in garment export earnings to a disappointing 1.5 per cent in the last fiscal year.

Garment export earnings, which ensure nearly four-fifths of the country’s entire export proceeds, had been recorded at 11 per cent and 16 per cent growths respectively in the previous two fiscal years.

Industry watchers now say that garment shipment growth in 2009-10 fiscal could have been definitely minus if shipments to some new markets could not be ensured.

The EPB report shows that Bangladesh garment exports to Turkey increased by 28 per cent in the year to $306 million, to Japan 134 per cent to $174 million and to Australia shipment increased by 84 per cent to $85 million.

According to South African official statistics, Bangladesh garment shipments to that country amounted worth $48 million in 2009 calendar year, up nearly five per cent from 2008 and more than double the shipment in 2007.

Garment shipments to China and Hong Kong increased by 41 per cent to $45 million, Brazil 15 per cent to $45 million, Saudi Arabia 29 per cent to $22 million, South Korea 306 per cent to $22 million, India 18 per cent to 13 million, New Zealand 263 per cent to $10.5 million and garment shipments to Taiwan doubled in the year to $ 5 million.

According to EPB records, there had been very insignificant presence of Bangladeshi garments in those new markets even three to five years back.

‘At least 10 new markets including Turkey, Japan and Brazil are making us much hopeful as growth in shipments there is very high,’ said BGMEA president, Abdul Salam Murshedy.

Murshedy said exporters were quite serious now to explore new markets. ‘Although volume of shipments still remains very tiny there, compared with our traditional markets, local exporters have been welcoming the buyers from the new markets, even showing flexibility in supplying their smaller orders,’ he said.

Mostafizur Rahman, executive director of the Centre for Policy Dialogue, said the local exporters became serious to explore new markets after they started facing troubles in traditional big markets like USA and EU during the recession.

Anwarul Alam Chowdhury Parvez, chairman of leading export house Evince Group, said importers from new markets became interested to make deals with Bangladeshi suppliers in recent times.

‘Japanese are thinking to reduce their dependence on China and Turkey is looking for cheaper souring destinations as rising cost of garment production in their country put their brands and apparel exporters into difficulty… Many such external factors are helping Bangladesh,’ Parvez said.

Both Rahman and Parvez foresee that Bangladesh garment sector would find a huge export markets in the next few years if the industry can keep up confidence of the importers.