Knitwear manufacturers fear that they will be in a real danger if the global financial turmoil prolongs and heads for a recession in the EU and the USA.
Ominous signs of an export slump are already evident as foreign buyers now seem extra cautious in placing orders, Bangladesh Knitwear Manufacturers and Exporters Association president said Saturday, announcing the schedules for the sector’s annual show.
‘Volumes of orders have declined by at least 10 per cent in the past one month and a half compared with the trend of previous months or the same period in the past year,’ he said, adding that the declines would be reflected in export figures from September onwards.
Exports of knitted wear including T-shirts and sweater constituted $5.6 billion out of $10.7 billion total apparel exports proceeds of the country in the past fiscal.
The BKMEA leader rejected predictions of government officials and a section of garment exporters that Bangladesh’s apparel industry might gain from the global economic turmoil due to its concentration on low-cost products.
‘I confidently disagree with such observations,’ Hoque said, arguing ‘It is a common economic behaviour that low-income group consumers, who dominate the market, slash their volume of shopping during economic slowdown.’
He regretted that the government downplayed the gravity of impacts of the global economic turmoil on Bangladesh’s major export industry by assigning a joint secretary to chair a crucial policy meeting later this month.
He suggested an adviser or secretary-level meeting should take place to weigh the possible impacts of the ongoing crisis and plan proper responses.
‘Precautionary measures are required for preparing the industry for absorbing the market shocks.’
The BKMEA leader said although depreciation of Bangladesh’s currency against importers’ currencies could have been effective in such a critical period, but it might make imports costlier, thus influencing inflation.
‘We want a package of supports for the exporters to face the crisis,’ said Hoque, specifically demanding increased cash incentive on exports.
Chief adviser Fakhruddin Ahmed is expected to inaugurate the three-day 4th Bangladesh Knitwear Exhibition 2008 at Hotel Sheraton tomorrow.
The exhibition will have 56 stalls — 52 booked by local knitwear manufacturers and allied industries and the rest by foreign yarn manufactures and software developers.
He informed that several dozens of buyers from USA, Central Europe, Croatia, Brazil and Japan would visit the fair.
Despite 75 per cent of Bangladesh’s knitwear are shipped to Europe and 15 per cent to USA, Japan has been designated as the focus country in the fair this year.
Choosing Japan is a part of their market diversification drive, the industry leader said, observing that Japan imports $8.9 billion worth of knitwear while Bangladesh shares only $6.3 million.
Two industry seminars will also be held during the knitwear exhibition.