Data cast fresh doubts on apparel manufacturers' export pains
Sunday, 17 May 2009
Mushir Ahmed
A series of data has cast doubt on whether or not the country's garment exports have been significantly affected by the global economic recession.
Although the manufacturers have been harping since September last year that they were badly hit by the downturn, data released by the US Commerce Department and the country's Export Promotion Bureau (EPB) narrate a different story.
In the past one week, the United States have published its first quarter apparel import figures, showing Bangladesh is the 'main winner' thanks to its cheap prices.
The EPB data show that garment exports remained bouyant, posting a 20 per cent plus growth in the first nine months and prices still remained in the positive territory.
So strong has been the growth of garments and textile items that they now make up around 82 per cent of the country's exports, up from 78 per cent last year.
"The overall Bangladesh apparel exports are far better than what the manufacturers are projecting," said the Bangladesh sourcing head of a top European apparel retailer.
"Compared to other countries, Bangladesh garment industry is in fairly good health. It is not as bad as it could be. Knitwear is quite fine. Woven is suffering. But it will start to grow again as there is a level of bottoming out in major markets in Europe," the official said.
The comments came as the US data show Bangladeshi apparel shipments surged 13 per cent in dollar terms between January and March when the world's top economy's overall clothing imports fell by 11 per cent in value and 9.1 per cent in volume.
There was no surge in shipments from China with a rise of only three per cent in value and a decline of nearly two per cent in volume, although the country still occupies some 31 per cent of the US apparel market.
Vietnam resisted China's threat but its shipments grew only five per cent after increasing 20 per cent the last year.
Officials said Dhaka benefitted from its low cost manufacturing status as unit prices stay 20 per cent below average level for Bangladeshi manufacturers while China is only three per cent under average.
Top US budget retailer, Wal-Mart, the single largest apparel buyer from Bangladesh, has posted a double digit increase in sales in April, meanining its import from cheaper sources remained strong.
"Data clearly show that despite the sharp global slowdown, Bangladesh garment exports have done relatively well," finance advisor Mashiur Rahman told FE recently.
"If they are in fact been hit hard by the downturn, let the manufacturers come up with their data. But so far they haven't done so," said a top finance ministry official.
"We wanted to include them in the interim stimulous package. But they could not make up their case," he added.
The EPB data also question authencity of the pains that the garment manufacturers have depicted through every opportunity with the press.
EPB said the country's garment exports have soared by 42 per cent in the first quarter, with the impressive performance due largely to five per cent minus growth in the corresponding period in 2007.
The apparel export slowed down to minus 1.5 per cent in the second quarter i.e between October and December but rebounded in the third quarter by around seven per cent.
Overall in the nine months to March, clothing shipments surged by 20 per cent, against an overall export growth of 14.5 per cent.
Compared to the fall of over 20 per cent in jute exports, 13 per cent in frozen food and 20 per cent in pharmaceuticals, this year garments -- both knitwear and woven --- remained the only bright spot in Bangladesh's export basket, the EPB said.
Experts said with the retailers in the rich nations showing signs of recovery, worst may now be over for global trade, meaning Bangladesh garment shipments are destined to spike with the slightest hint of green shoots.
Fazlul Hoque, the president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), who has pleaded the government for a 10 per cent cash incentive after claiming apparel exporters were badly affected, however, remained skeptical about growth in near future.
"We have all along said things would be far worse from April. Let's us wait and see," he said.
Abdus Salam Murshedy, the president of the other garment group, said the buyers have slashed their order prices between 10 and 20 per cent, squeezing out the last vestige of profts from the local manufacturers.
The EPB data, however, shows the price of manufactured products recorded a 0. 50 per cent growth in the first nine months of the year.
A series of data has cast doubt on whether or not the country's garment exports have been significantly affected by the global economic recession.
Although the manufacturers have been harping since September last year that they were badly hit by the downturn, data released by the US Commerce Department and the country's Export Promotion Bureau (EPB) narrate a different story.
In the past one week, the United States have published its first quarter apparel import figures, showing Bangladesh is the 'main winner' thanks to its cheap prices.
The EPB data show that garment exports remained bouyant, posting a 20 per cent plus growth in the first nine months and prices still remained in the positive territory.
So strong has been the growth of garments and textile items that they now make up around 82 per cent of the country's exports, up from 78 per cent last year.
"The overall Bangladesh apparel exports are far better than what the manufacturers are projecting," said the Bangladesh sourcing head of a top European apparel retailer.
"Compared to other countries, Bangladesh garment industry is in fairly good health. It is not as bad as it could be. Knitwear is quite fine. Woven is suffering. But it will start to grow again as there is a level of bottoming out in major markets in Europe," the official said.
The comments came as the US data show Bangladeshi apparel shipments surged 13 per cent in dollar terms between January and March when the world's top economy's overall clothing imports fell by 11 per cent in value and 9.1 per cent in volume.
There was no surge in shipments from China with a rise of only three per cent in value and a decline of nearly two per cent in volume, although the country still occupies some 31 per cent of the US apparel market.
Vietnam resisted China's threat but its shipments grew only five per cent after increasing 20 per cent the last year.
Officials said Dhaka benefitted from its low cost manufacturing status as unit prices stay 20 per cent below average level for Bangladeshi manufacturers while China is only three per cent under average.
Top US budget retailer, Wal-Mart, the single largest apparel buyer from Bangladesh, has posted a double digit increase in sales in April, meanining its import from cheaper sources remained strong.
"Data clearly show that despite the sharp global slowdown, Bangladesh garment exports have done relatively well," finance advisor Mashiur Rahman told FE recently.
"If they are in fact been hit hard by the downturn, let the manufacturers come up with their data. But so far they haven't done so," said a top finance ministry official.
"We wanted to include them in the interim stimulous package. But they could not make up their case," he added.
The EPB data also question authencity of the pains that the garment manufacturers have depicted through every opportunity with the press.
EPB said the country's garment exports have soared by 42 per cent in the first quarter, with the impressive performance due largely to five per cent minus growth in the corresponding period in 2007.
The apparel export slowed down to minus 1.5 per cent in the second quarter i.e between October and December but rebounded in the third quarter by around seven per cent.
Overall in the nine months to March, clothing shipments surged by 20 per cent, against an overall export growth of 14.5 per cent.
Compared to the fall of over 20 per cent in jute exports, 13 per cent in frozen food and 20 per cent in pharmaceuticals, this year garments -- both knitwear and woven --- remained the only bright spot in Bangladesh's export basket, the EPB said.
Experts said with the retailers in the rich nations showing signs of recovery, worst may now be over for global trade, meaning Bangladesh garment shipments are destined to spike with the slightest hint of green shoots.
Fazlul Hoque, the president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), who has pleaded the government for a 10 per cent cash incentive after claiming apparel exporters were badly affected, however, remained skeptical about growth in near future.
"We have all along said things would be far worse from April. Let's us wait and see," he said.
Abdus Salam Murshedy, the president of the other garment group, said the buyers have slashed their order prices between 10 and 20 per cent, squeezing out the last vestige of profts from the local manufacturers.
The EPB data, however, shows the price of manufactured products recorded a 0. 50 per cent growth in the first nine months of the year.