Knitwear makers target Russia

Monira Munni

Garment makers have set their eyes on Russia, aiming to sell apparel worth US$2.0 billion to Europe's most populous nation, as part of their latest efforts to diversify export markets away from the EU and the US.

Manufacturers told the FE Thursday Russian economy has been growing fast, but retailers there buy clothing mainly from Turkey and China as direct sourcing from Bangladesh is still in its infancy.

"Russia is a good market both in terms of price and product demand," Mohammad Hatem vice president Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) told the FE.

"The fast-booming Russian market now accounts for only one per cent of our total garment exports. But a BKMEA study has shown that we can raise apparel export to Russia to at least $2.0 billion within the next three-four years," Mr. Hatem said.

As part of a drive to find new markets for the Bangladeshi apparel, two local trade promotion teams will visit Moscow this year to forge links with the Russian retailers and get them acquainted with Bangladeshi products.

Officials said the first team will be led by knitwear exporters who will attend a fair in Moscow where they will display the entire range of Bangladeshi apparel and hold parleys with the buyers and the Russian trade bureaucrats.

The second team will travel to the world's largest country the next month. Senior officials of the Bangladesh Bank, Ministry of Commerce and Export Promotion Bureau and some members of the BKMEA will make the trip.

"In the first tour our emphasis will be to exclusively promote products and try to kick off direct trade ties between Dhaka and Moscow. In the second we will hold a series of meetings so that we can cement the links and foster direct trade," said Mr. Hatem.

"What we need now is to open a direct channel to enter Russia. Many Russian retailers simply don't know that our apparel is the most cost competitive in the world and quality of our products is as good as China or Turkey," said a knitwear exporter.

Local manufacturers are making shipment through indirect sourcing via Turkey, Finland and Germany through the telegraphic transfer (TT) system due to some custom-related obstacles, he said.

EPB officials said Russian buyers cannot import directly from Bangladesh, as the two nations don't have banking links that can allow shipment of merchandise through letter of credit. They can only ship a negligible amount through the TT process.

"The BB and commerce ministry officials will hold meeting with their Russian counterparts during the September visit. Hopefully, the LC system will be in place immediately after the tour," Mr Hatem said.

The country fetched $19 billion from apparel export in the just concluded 2010-11 fiscal year, posting an impressive 42 per cent growth over the same period of the previous fiscal year.

But about 85 percent of the apparel was shipped to only two markets --- the US and the 27-nation bloc European Union --- leaving the local exporters extremely susceptible to any major economic downturn in the world's two largest economies.

In the 2009-10 fiscal year, Bangladesh apparel export fell down to a meagre two per cent after the global recession dried up consumer spending in the US and the EU.

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Govt hopeful of achieving Boro procurement target

Talha Bin Habib

The government could achieve its Boro rice procurement target this year as the concerned department has been getting positive responses from the millers since the inception of the drive this month, officials said.

The government has started procuring Boro rice from June 5 last. This year the target for procurement of Boro rice has been fixed at about 0.6 million tonnes. The procurement of per kilogram (kg) of rice has been fixed by the government at Tk 29.

The concerned department has already stored nearly 0.1 million tonnes of Boro rice in the government depots so far due to the positive responses from the millers.

"We have already stored about 83,000 tonnes of Boro rice at the Central Supply Depot (CSD) and Local Supply Depot (LSD) of the government since the start of the procurement drive," an official of the procurement division of Directorate General of Food told the FE Monday.

He said the food department has already made a deal with the millers for supplying rice in line with the agreed price between the government and the millers.

"We had already made deal with 9,640 millers to supply rice to the government," Director (Procurement) of Directorate General of Food Md Badrul Hasan told the FE Monday.

He said so far the millers have agreed to supply about 0.432 million tonnes of rice. The rest amount of rice, as per the government target, will be fulfilled easily since the concerned department is going to sign more contracts with more suppliers (rice millers) soon.

He said the government has set September the deadline for rice procurement drive, and it would be possible to achieve the target even before the timeframe.

"We strongly believe that the government target to procure 0.6 million tonnes of rice from internal sources can be possible even by July if favourable weather persists in the country," he added.

Asked whether the price of Boro procurement should benefit the farmers, he said the price of per maund of coarse paddy is now between Tk 650 and Tk 700.

"If we consider the present market price of paddy and procurement price of rice by the government then it can ensure guarantees of benefits to both the farmers and the millers," he asserted.

It is worth mentioning that last year the government purchased Boro rice at Tk 28 a kg. According to the present food stock situation, the government has 0.735 million tonnes of rice and wheat against a maximum capacity of stocking 1.5 million tonnes.

The food planning and monitoring committee at a meeting recently set the target for buffer rice stock at 1.1 million tonnes for the 2011-12 fiscal. About 5.2 million tonnes of food grains have already been imported through the public and private channels. The figure will reach 5.5 million tonnes as there is a possibility to import more 0.3 million tonnes of food grains during the last one week of the current 2010-11 fiscal.

Last year (2009-10 fiscal) about 3.5 millions tonnes of foodgrains through the private and public channels were imported.

The government had a target to procure about 1.2 million tonnes of rice and paddy from the internal sources last year (2009-10). Out of the procurement target, the government was able to procure only 0.56 million tonnes of rice from the internal sources. And out of 0.15 million tonnes of wheat procurement target, only 8,000 tonnes were procured last year (2009-10 fiscal), according to the concerned department.

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