Export decline eases but RMG still weak

The sharp decline in exports experienced in July eased in August, although the performance remained well below target as the country's key garment sector suffered from continued weak orders.
During August total exports fell by 2.32 percent on a year earlier and were more than 13 percent below the government's target. In July, they were down 21.08 percent on the same period in 2006. In total for the first two months of the fiscal year 2007-2008 exports are down 11.69 percent on a year earlier and 23 percent behind target.
Export earnings in August were $1.13billion compared to $1.16billion a year earlier, according to the Export Promotion Bureau (EPB) statistics released yesterday.RMG exporters said the industry had been hit by difficult markets in both the US and Europe. In the US, some major buyers such as Walmart have been struggling with large inventories and weakening demand while in Europe unusual weather patterns have disrupted customers normal buying habits, especially for winter clothes.
One exporter told The Daily Star that the political chaos at the turn of the year had undermined buyers' confidence. There have also been concerns that Bangladesh is losing out to rivals such as Cambodia, Vietnam, China and Sri Lanka.
In the two months to August 31 exports of woven garments were down 16.6 percent at $762 million while knitwear exports were down 12 percent at $791m. While no monthly break down was provided, the figures indicated a marked slowdown in the rate of decline over July notably in the knitwear sector. Readymade garment exports accounted for around 75 percent of the country's exports in the last fiscal year.
MA Baset, director of Bangladesh Knitwear Manufactures and Exporters Association (BKMEA), said it was not only Bangladesh that had been hit by a recession in the clothing sector caused by climate change in the European market.
Earlier, Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told The Daily Star, "The export will be positive from September and from October and onward, we will see a very good export growth," he added. "At the end of the day, there is nothing to be worried."
Salam Murshedi, director of Bangladesh Garments Manufactures and Exporters Association (BGMEA), said woven export earnings are not satisfactory when compared to the capacity of Bangladeshi exporters.
A decent and peaceful environment is required for Bangladesh's apparel sector growth, he said adding, "If exporters continuously produce their products, export earnings from the sector will pick up further by December this year".
According to the EPB figures leather, ceramics, jute goods and engineering products recorded negative growth and failed to achieve their export targets.
Tea, vegetables, agro-processed foods and flower performed well -- exceeding their targets. Raw jute, footwear, and frozen food also recorded growth, but failed to achieve the month's export target.