Nepal's RMG export to US suffers heavily

Export of Nepali readymade garments to the United States (US), which is the single largest market, suffered heavily for yet another month, as the month of August 2007 saw a decline of 27 percent in terms of value.
According to Monday's The Himalayan Times daily, it is the eighth consecutive month this year that export of Nepali textile and apparel products have lost ground.
Garment exports to the US has been suffering from the very beginning of the year, as it witnessed a whopping decline of 54 percent in January, 64 percent in February, 47 percent in March, 3 percent in April, 63 percent in May, 42 percent in June and 45 percent in July.
Export had suffered a loss of 30 percent in 2004 and rose by 41 percent in 2005. However, it slowed down with a marginal drop of 6 percent in 2006. As the US alone absorbs more than 80 percent of the total Nepali garment exports, a single country concentration is blamed to be one of the major reasons for such a plummet.
Garment and apparel products valued at over 1.83 million US dollars were exported to the US in August 2007, whereas garment products worth over 2.49 million dollars were exported in corresponding month last year, reveals the figures provided by the Garment Association of Nepal.
The continuous fall in exports indicates that the Nepali readymade garment industry is on the verge of a "complete collapse," as global markets have already been opened to all competitors without quota restrictions.
An industry insider stressed on the need for enhancing competitive strength in terms of price and quality of Nepali products to compete with the big suppliers from India and China and other fervent players like Bangladesh, Sri Lanka and Cambodia.
Besides building up competitive strength, diversification of both markets and products has remained a major challenge for Nepali garment manufacturers and exporters.
A gradual increment in export to the European Union and Canada has lit rays of hopes for garment manufacturers and exporters. These two big and potential markets have already provided duty free access to exports from least developed countries, including Nepal. However, Nepal's share of garment exports to these markets is still as low as 20 percent of total exports.