Knitwear exporters hunt new markets as global recession fears to hit industry

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FE Report
Knitwear manufacturers said Saturday that they have targeted new markets such as Japan as they feared a global financial meltdown would lead to sharp fall in shipments to traditional markets in North America and Western Europe.
"Recession fears in the United States and Western Europe have already resulted in falling export orders for our knitwear items," said Md Fazlul Hoque, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
"A massive black cloud has gathered over our heads. Orders have started to decline since middle of this year. We see a bleak future for the industry if the manufacturers and the government don't take urgent precautionary measures," he said.
The leader of some 1300 knitwear factories said his group has already decided to look for new markets for their products as part of safeguard measures against the looming threat.
"We have targeted Japan as the next destination of our exports. Japan is the world's second largest economy and the fourth largest knitwear importer, which last year bought US$9.3 billion worth of knitted clothing," he said.
In the 2007-8 fiscal year, Bangladesh exported $10.7 billion worth of apparel with the United States and Western Europe accounting for more than 90 per cent of the total shipments.
Hoque said this over-reliance on the two traditional markets could spell doom for the country's garment industry if retail sales plunge sharply in the west as direct fallout of the global financial meltdown.
"We have to find new markets of our products at any cost. This year we have exported garments worth only $6.4 million to Japan. But, if we try hard we can easily increase the figure to $1.00 billion per annum shortly," he said.
Japan has been designated as the main focus country in the upcoming three-day Knitwear exposition beginning on October 20 and Hoque said already ten Japanese buyers are now in the city to take a look at Bangladeshi products.
A study conducted by the BKMEA found that in recent years, Japan's knitwear import from Korea, Italy and Taiwan have fallen while imports from Thailand, Vietnam, India, Cambodia and Bangladesh have experienced growth.
Bangladesh's export to Japan has been growing at an average 11.72 per cent since 2002. Japan mainly imports knitwear products like pullovers, cardigans, cotton T shirt, jerseys and hosiery items.
BKMEA leaders said they can offer the best bargain prices in four out of top ten items imported by Japan. Cotton T-shirt is the most potential for Bangladesh in terms of prices, according to a BKMEA study.
Hoque added: "Japan is providing generilised system of preference treatment to imports from 164 developing and least developed countries and it will continue until March 2011. It is time we should exploit these opportunities."
Japan aside, the BKMEA has also targeted new markets in Eastern Europe, which is growing over five per cent a year since their integration with the European Union, and fast-growing nations in Africa.
Hoque said fears of recession in the world's top economies have already hit the Bangladesh shores, with top exporters reporting drop in shipment orders.
"Issuance of UD (utilisation declaration against export orders) to the US and the European market declined by at least 10 per cent during September 2008 over the same period last year," BKMEA chief said.
"We urge the government to postpone its move for raising power and gas tariffs for at least six months for the interest of the sector," he said, adding the commerce minister should himself call the meeting.