Current downtrend in export likely to continue till April: Rubana Huq
President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Dr Rubana Huq has said the current downtrend in RMG export will probably continue till April of this year.
"I seek help from all, to see things from the industry perspective, and to frame our narrative for policymakers to pay heed to the real situation and not the perceived one," she said in an open letter today.
She said the uncertainties and stresses caused by the second wave of Covid-19 persist, coupled with the unavailability of vaccine, and highlighted the impact on the global economy it would leave.
Given the effect of lockdowns in Europe and USA and their impact on retail and demand, the worst-ever Christmas sales the world has seen, and most of all the effect of price decline (which is around 5 percent since September 2020), it was a dark year for the industry, said the BGMEA chief.
"This is one of the most tragic turns in our industry. In the absence of proper restructuring or even an exit policy, shrouded by western bankruptcies, hounded by buyers' unforgiving contracts and force majeure clauses, factories are facing turbulent times," Rubana said.
The commercial banks have been instructed by Bangladesh Bank to arrange repayment of the stimulus package by the third week of January, 2021.
"The letters were issued day before yesterday. And the industry, amidst the second wave of Covid is taking a deep plunge into uncertainty," Rubana said.
Without the moratorium of the salary stimulus package being extended by six more months or the tenure of the loan being extended by at least one more year (currently 24 months), the industry will collapse, she said.
The Export Promotion Bureau (EPB) of Bangladesh has just published the export performance data for the month of December 2020 which continues to portray the worrisome scenario of exports.
"RMG has had consecutive downturn in export in December by 9.64 percent, which wrapped up the annual export performance for 2020 with an unprecedented fall of 16.94 percent," she said.
In December, the BGMEA chief said, woven garment export posted worst performance since June 2020, as it declined by 18.07 percent.
Knitwear export managed to have a relatively stable position with --0.45 percent growth in December, thanks to the demand for apparel for home use, she mentioned.
While looking at two years' trend, it shows that growth between October 2018 and 2020 was 26.03 percent, and November 2018 and 2020 was 14.32 percent.
"The two years' change in export for the month of December is -8.55 percent, meaning that we exported 8.55 percent less in December this year compared to what we exported in December 2018!" said the BGMEA chief.
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