Despite growing fear of negative effect on garment exports following militants
attack on the Holy Artisan Restaurant in Gulshan diplomatic zone that killed 28 including 18 foreign and Sholakia, indications suggest that the country would be able to stay the rising course of exports overcoming the shadow.
North America based Alliance and the EU based Accord – two platforms monitoring Bangladesh’s safety compliance in garment factories after the Rana Plaza aaccident that killed over 1100 garment workers- said they would continue to work for their major brands which engaged them to work for them.
Growing fear despite rising exports
Meanwhile reports said garment export registered a growth of $3 billion earning in hitting total exports to over $28 billion despite many speculation of a bad yea through political crisis and a cloud of rising militancy in the country. Exports continued to rise in its traditional US and EU market, EPB sources said.
But despite the words of hope local manufacturers and exports are facing new setback after the Gulshan attack as many buyers are reluctant to visit Bangladesh and put new buying orders. They are asking exporters to meet them in third country like Singapore, Hong Kong and Dubai, because they are farad of safety. Particularly after the killing of Italian buying house managers in Gulshan attack, they are really afraid as militancy in Bangladesh is capturing global headlines. Many of them have cancelled their scheduled visit and the situation is still dominated by uncertainty. It is yet to be seen how the new situation is going to dominate the trade.
Strong export to Japan, China
Meanwhile growing market in China, Japan and India is bringing new impetus to garment export, although export to Indian market is remaining at low level because of counter-veiling duty to keep Bangladesh’s merchandise as much away as possible.
But export to China and Japan soared in fiscal 2015-16 highlighting the strongest sign yet of growing position of Bangladesh’s apparel sector in global trade.
IN 2015-16 garment exports to Japan stood at $774.47 million, up 18.68 percent year-on-year, according to data from the Export Promotion Bureau. During this time garment exports worth $341.22 million were shipped to China which is a rise of 11.9 percent from a year earlier.
The reason for the rise is the recent relaxation of the rules of origin (RoO) by the governments of the two countries. The RoOs determines the national source of raw materials used in the product and they vary from country to country.
Bangladesh has duty-free access for its garment products for items made of local textile and also from imported fabrics to the Japanese market.
The country has been enjoying duty benefits on its woven garment exports to Japan for many years now and from April last year, Bangladesh’s knitwear shipments were also given the same privilege.
Japan’s apparel market is worth about $40 billion a year, and traditionally nearly 80 percent of it is catered by Chinese imports, media reports said. In 2008, the Japanese government adopted the ‘China plus One’ policy to reduce the overdependence on China, following which its traders started sourcing garment items from other countries such as Bangladesh, Vietnam and Cambodia.
On the other hand, Bangladesh’s garment exports to China also increased last fiscal year as the Chinese government awarded duty-free facility to 4,721 items.
China, despite being the largest apparel manufacturer in the world, is emerging as a major export destination for Bangladesh owing to its fast-expanding middle-class population.
At present, the majority of the Chinese garment makers produce high-end products for Western retailers, as they do not deem the $150 billion local market to be lucrative enough. The development has opened doors for Bangladeshi garment manufacturers to grab a larger share of the Chinese market.
Global focus on Asian markets
Reports said the International Textile Manufacturers Federation also recently
advised Bangladesh to focus more on the growing Asian markets of India and China, where the retail value of garment and textile consumption will more than double to $750 billion by 2020.
However, garment exports to India is not been increasing much because of countervailing duty imposed on Bangladesh’s apparel products. Although garment exports to India soared 30.86 percent to $136.42 million in fiscal 2015-16 from a year earlier, the export in terms of value is not enough.
Bangladesh considers the EU, the US and Canada as its traditional export destinations; and shipments to these markets have been increasing for many years now. Since 2009, Bangladesh has seen increased garment exports to 11 new destinations. The trend is expected to continue.