Exports to decline from March as UD issuance falls sharply
Sheikh Shahariar Zaman | Tuesday, 3 March 2009
Apparel export would fall in the coming months due to global economic crisis, as fewer raw materials were being imported into the country under a tax-free facility for shipment to major markets.
Clothing manufacturers avail the facility, under utilisation declaration (UD) certificates, from their trade body, BGMEA to import raw materials against export orders from overseas buyers.
The number UDs being issued by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in a month, therefore, indicates actual exports at least two to three months later.
"The UDs are the best indicator of future garment export," said Annisul Huq, president of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI).
"They show a trend as after issuing the document it takes about three months to deliver products," he said.
According the BGMEA, the UDs fell by 7.68 per cent in December and 4.98 per cent in January from the same period of the previous years, he said.
In January 2009, 17.334 million dozens of UDs were issued which was 18.242 million in January 2008.
"This is not a good sign as exporters are importing fewer raw materials against the UDs. It means our garment exports will decline in the coming months," he said.
The FBCCI president blamed the global economic crisis for plunging export trend.
"The ongoing global meltdown has hit hard our major markets, the European Union and the United States. Bangladesh is no longer immune to the crisis," Haq, a leading apparel manufacturer, said.
"Bangladesh exports showed resilience at the initial stage of the crisis but if the recession worsens, our exports will slump significantly," he added.
He urged the government to announce an immediate 'rescue plan' to prop up clothing sector, which account for three-fourths of the country's exports and 40 per cent of industrial workforce.
"Over two million people are directly dependent on the sector and export earnings buttress our balance of payment and help make import payments," he said.
Clothing manufacturers avail the facility, under utilisation declaration (UD) certificates, from their trade body, BGMEA to import raw materials against export orders from overseas buyers.
The number UDs being issued by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in a month, therefore, indicates actual exports at least two to three months later.
"The UDs are the best indicator of future garment export," said Annisul Huq, president of the Federation of Bangladesh Chamber of Commerce and Industry (FBCCI).
"They show a trend as after issuing the document it takes about three months to deliver products," he said.
According the BGMEA, the UDs fell by 7.68 per cent in December and 4.98 per cent in January from the same period of the previous years, he said.
In January 2009, 17.334 million dozens of UDs were issued which was 18.242 million in January 2008.
"This is not a good sign as exporters are importing fewer raw materials against the UDs. It means our garment exports will decline in the coming months," he said.
The FBCCI president blamed the global economic crisis for plunging export trend.
"The ongoing global meltdown has hit hard our major markets, the European Union and the United States. Bangladesh is no longer immune to the crisis," Haq, a leading apparel manufacturer, said.
"Bangladesh exports showed resilience at the initial stage of the crisis but if the recession worsens, our exports will slump significantly," he added.
He urged the government to announce an immediate 'rescue plan' to prop up clothing sector, which account for three-fourths of the country's exports and 40 per cent of industrial workforce.
"Over two million people are directly dependent on the sector and export earnings buttress our balance of payment and help make import payments," he said.