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Bangladesh’s new markets for RMG exports fail to respond

Bangladesh’s exports of apparel items to potential non-traditional markets declined significantly this year. Australia, Japan, China, Chile, Brazil, Russia, South Africa, New Zealand, Malaysia, Korea, India and Turkey are considered non-traditional emerging markets. Shipments to Brazil, Korea, Mexico, South Africa and Turkey slid 26.97 per cent, 16.97 per cent, 16.86 per cent and 14.87 per cent respectively in the July-June period of the fiscal 2016-17 compared to the same period a year ago. Exports to India, Japan and Australia dropped by 4.84 per cent, 3.87 per cent and 8.52 per cent respectively.

Some 15 per cent of Bangladesh’s readymade garment exports come from these non-traditional markets. Among the reasons for the fall are rising cost of doing business, sluggish global demand followed by low unit price of apparel items and high duties in many non-traditional markets. Duties are 33 per cent in Brazil, 30 per cent in both Turkey and Mexico and 40 to 50 per cent in South Africa. Moreover, the currencies were weaker in the importing countries, especially in Brazil, India, and Turkey, which contributed to sapping demand. Finally many factories in Bangladesh have been shut due to compliance issues. This had an adverse impact on production levels.