Winter RMG orders buoyant

RMG makers are upbeat as international buyers are booking orders to buy winter clothes from Bangladesh at cheaper rates in signs of a Wal-Mart effect amid global recession. Photo: Viyellatex

International buyers are placing a substantial number of bookings to collect winter clothing from Bangladeshi companies at cheaper prices as the major competitors are losing markets to the country amid global recession, apparel exporters said.
Bangladesh has already turned into a lucrative destination for the buyers for its cheaper clothes.
The exporters said the flow of orders indicates that exports of readymade garments (RMG) would pick up from the next few months although the prices offered are low.
Some recent Indian newspaper reports also supported such indication, saying the major competitors are losing markets to Bangladesh for its cheaper production costs.
The reports said Indian garment manufacturers have already been adversely affected by a steep fall in demand from the US and European countries, and Indian garment exporters may lose out to low-cost competitors.
Garment exports from India showed no sign of pickup this autumn-winter season following a gradual shift of international buyers to low-cost neighbouring countries, the reports said.
Bookings for Indian garments dropped sharply although exporters slashed prices by 11-12 percent.
“Major global buyers like Wal-Mart, JC Penney, Li & Fung, GAP and Target have indicated plans to cut offtake from India by 12-15 percent this year, while they are increasing their offtake in neighbouring countries,” Rahul Mehta, president of the clothing manufacturing association of India, was quoted as saying in a report.
Garment exports from India would be lower than Bangladesh, Vietnam, Indonesia and Cambodia, the reports said.
India is expected to end up exporting garments worth $9 billion this fiscal year, down by almost 10 percent compared to a year back, while Bangladesh is poised to export worth $12 billion garments, the reports said.
Currently bookings for Indian garments are 20-25 percent lower than the same season last year and sentiments are weak because of a gloomy outlook of its textile industry.
"Our export target for the current fiscal year was $9 billion. But due to the present market condition, we will be able to close the year with exports of only $8-$8.5 billion," Confederation of Indian Apparel Exporters President Amit Goyal said.
Meanwhile, top local RMG makers are optimistic about meeting the export target in the current fiscal year although exports of some other products from Bangladesh declined in July-December period.
Executive Director of Ananta Garment Ltd Badius-Salam said the flow of orders is still high compared to those of other competing countries.
"I hope to meet our targeted 15 percent sales growth this year. Last year the company exported products worth $26 million and this year it will increase," Salam said.
"But the offered prices are too low," he added.
A senior official of Opex Group, one of the leading apparel makers, said they have no problem with the flow of orders until now.
"But the problem is low price. The buyers are not offering higher prices for the recession. Now we are trying to make profit by increasing the volume for delivery," the official said requesting anonymity.
Monir Ahmed, managing director of Abedin Group of Industries, also said orders are satisfactory now although he experienced a relatively low volume of orders in the last three months.
He also vented frustration over the low prices offered by the buyers.
Woven garment surpassed the export target by 2.45 percent, knitwear 2.16 percent, terry towel 10.96 percent and textile fabrics by 8.16 percent during the July-December period of the current fiscal year, according to Export Promotion Bureau.
Bangladesh exported woven garment worth $2.805 billion against the target of $2.738 billion, knitwear $3.240 billion against $3.172 billion, terry towel $66.39 million against $59.83 million and textile fabrics $41.63 million against the target of $38.49 million in the period.
The export trend shows that the target of exporting woven and knitwear worth $12.267 billion for the current fiscal year is quite achievable, exporters said.
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