In the first 11 months of the current financial year, the export income from the ready-made garment sector was 4 thousand 385 million dollars. This is 2.86 percent more than the 4,253 million dollars in the same period of the previous year. However, it is 7.63 percent less than the target set by the government. The government had set an export revenue target of $4,747 million from July 2023 to May 2024.
Export earnings of knitwear increased by 6.15 percent but earnings of oven products decreased by 1.09 percent. The income from net products was 2 thousand 470 crore 95 lakh dollars and from oven 1 thousand 914 crore 11 lakh dollars.
In the first 11 months of the fiscal year 2023-24, there was a positive growth in the export earnings of ready-made garments, but the export earnings in May fell by more than 17 percent. At this time, the income from the export of clothing products was 335 million 64 million dollars, which was 405 million 32 million dollars in May of the previous year.
Net product income decreased by 20.75 percent in May. The revenue in May was $1.83 billion which was $2.31 billion last year. The income of oven products decreased by 12.48 percent to 152.5 million dollars. Last year the income was 174 crore 29 lakh dollars.
According to the concerned people and economists, there are many reasons behind the decrease in the income of the garment industry. One of the reasons identified as the decrease in the unit cost of clothing. On the other hand, due to the global political unrest and the Russia-Ukraine war, the downward trend of the work order is noticeable, as a result of which there is a negative growth in export earnings in May, they commented.
In this regard, the managing director of Cotton Group Mohammad Hasan said, ‘The price and demand of clothing products in the global market have decreased. Importers of our products have reduced the prices of products in recent months compared to earlier. On the other hand, due to inflation, the demand for clothing products has also decreased. As a result, the overall export of ready-made garments has seen negative growth for two consecutive months. Besides, the production of factories has decreased due to gas supply shortage. As a result, it has an impact on export earnings.’
Fearing more negative impact on exports, Mohammad Hasan said, ‘Exporters are not able to ship on time due to container crisis. A large number of cars are waiting in line to receive containers with export-oriented products.’
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president SM Mannan Kochire talked about the decline in export earnings in the ready-made garment sector. He said, ‘Production cost of export-oriented clothing products has increased several times. Because the wages of workers have increased. The price of electricity and fuel has increased. As a result, we are unable to compete with our competitors on price. In such a critical moment, buyers have reduced the prices of products. As a result, there has been a decline in exports.’
To maintain positive growth in export earnings, gas and uninterrupted power supply must be ensured. Otherwise, the business leader expressed fear that the negative trend may continue in the coming months.
Garment exporters want withdrawal of increased tax rates in the proposed budget to turn around the next financial year. Along with this, Kochi demanded to reduce the tax at source from 1 percent to 0.5 percent and to maintain it for the next 5 years.
Executive Director of Policy Research Institute. Ahsan H Mansoor said, ‘The global economic and political situation is currently somewhat volatile, which has an impact on our economy, especially in the export sector. Demand for apparel products has decreased due to inflation in several countries. On the other hand, due to political unrest, buyers are showing some conservative attitude in placing work orders. As a result, there has been a negative impact on the export of all products including ready-made garments.
However, some improvement in the situation is being observed and exports will return very soon, said the economist.
Meanwhile, overall export earnings in the country fell by 16 percent in May. Exports of goods earned $4.07 billion in May, which is 16.06 percent less than last year. In May last year, the revenue was 4.84 billion dollars.
On the other hand, the export income of July-May of the current financial year has increased by two percent. During this period, the income from export of goods was 51.54 billion dollars, which was 50.52 billion dollars in the same period last year.
IHO/MMAR/JIM
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