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Bangladesh:Low availability of woven fabrics may threat RMG export |
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2004-9-15
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Export Promotion Bureau (EPB) statistics indicates a massive supply shortfall of locally produced woven fabrics, a determinant to qualify for GSP (generalised system of preferences) facilities in the EU market, due to which apparel manufacturers fear of losing market in the post-MFA (multi-fibre arrangement) regime.
EPB data for 2003-2004 shows supply of only 18.66 percent of the required fabrics for woven garment export manufactured by local manufacturers, to the European Union (EU) market. The supply was only 10.70 percent of the requirements for export to the combined EU-US market.
In view of the huge supply shortfall of fabrics, export-oriented readymade garment (RMG) manufacturers have sought special measures from the government including setting up of central bonded warehouses, a long-drawn demand of the RMG exporters and a strong backward linkage industry for the sector.
Bangladesh enjoys GSP facilities in the EU market while the US, a big apparel market for Bangladeshi products, allows export quota for RMG, which will expire next year.
"Particularly with the post-MFA era set to stage in from January next, we are in supply fear of woven fabrics," said Bangladesh Garment Manufacturers & Exporters Association (BGMEA) President Annisul Huq.
He said a major portion of RMG export earnings comes from woven garments.
In the last fiscal year, the BGMEA members fetched $3528.07 million from woven garment export and $1527.17 million from knitwear, while the BKMEA (Bangladesh Knitwear Manufacturers and Exporters Association) members fetched $10.01 million from woven garment export, and $620.85 million from knit export.
Although the EPB statistics show a slight rise in supply of locally produced woven fabrics in the last fiscal year, it is not enough to meet the demand of RMG industry, the BGMEA chief said.
Under the GSP, the woven fabric supply was 16.75 percent in 2001-2002, while it was 16.08 percent in 2002-2003.
The BGMEA leader regretted that the process of setting up central bonded warehouses was halted by the Cabinet Committee on Economic Affairs despite recommendations from the National Coordination Council (NCC).
The NCC on July 4 this year recommended setting up of central bonded warehouses in export processing zones and floating a Tk 3,000 crore special fund for the investors in the textile sector, but the cabinet committee rejected the proposal on August 16.
He also said that the government should avail the derogated GSP to keep up and expand share in the EU market. "Benapole land port should be opened for yarn import to help local RMG industry become more competitive," he suggested. |
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