RMG export performance lower than expected in first quarter

Published in Daily Observer on October 25, 2017

Country’s readymade garment (RMG) export has missed target in first quarter (July-September, Q1) of the current fiscal year (FY2017-18, FY18) causing uncertainty to achieve US$50 billion by 2021.
According to the latest statistics of Bangladesh Export Promotion Bureau (EPB) RMG (knit and woven) export for July-September was $7.1 billion which is $26.72 million less than the government set target of $7.2 billion for the period.
In the meantime export performance for the same time in the last fiscal year was $6665.90 million and for the first quarter of the current financial year the performance is 7.17 per cent.
Shahid Ul Islam, former BGMEA Vice President said if the current situation continued, it would be difficult to achieve the target by 2021.
He said the RMG sector became under pressure in local and international market as some rival countries have own cotton, capital machinery, cheaper loans and fuel costs.
He said to be competitive in the global market, some countries offered their exporters devalued local currency, low cost fuel and other facilities.
He also said the government was going to make available LNG in coming year but the cost might be more than the existing gas price.
Professor Md Yousuf of the Economics Department at Dhaka University said both remittance and export were not growing as per projection, which may cause pressure in the overall macro economy in the country.
He said the government should address the situation and encourage exporters with some incentives like currency devaluation and lowering both loan and fuel costs like other Asian rival countries.
The EPB data shows that overall export earnings in September this year has dropped to $2.03 billion, which is around 10 percent less than the same month of the last year.
The data shows the rise in export in July and August helped Bangladesh post a 7.23 percent growth in the first quarter of FY18 fiscal year, but missed the target by around 3 per cent
In the first quarter, readymade garment sector contributed to around 82.5 per cent of total exports, with a nearly 10 per cent growth as per total volume.
The BGMEA Senior Vice-President Faruque Hasan said that the exports fell in September because the factories had remained closed for eight to 10 days during Eid-ul-Azha.
“Our competitors like India, Vietnam, and Cambodia are giving many incentives to the garment sector for raising exports,” he said.
The BGMEA leader added it would be challenging to maintain growth as garment prices were falling in global markets.
The government has set a target to export goods worth $37.5 billion for the FY18.
Exports in the FY amounted $34.59 billion, which was 3.39 per cent more than the previous year.