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Rise of non-traditional markets fuels apparel exports

"As per Export Promotion Bureau (EPB) data, in the July-December period of the current FY2018-19, Bangladesh’s apparel shipments to new export destinations like Australia, Brazil, Chile, China, India, Japan, Korea, Mexico, Russia, South Africa and Turkey posted a robust growth of 36.21 per cent in the first half of the current fiscal year, riding mainly on enhanced cash incentive and initiatives of exporters to diversify their markets."

 

Rise of non traditional markets fuels apparel exports 001As per Export Promotion Bureau (EPB) data, in the July-December period of the current FY2018-19, Bangladesh’s apparel shipments to new export destinations like Australia, Brazil, Chile, China, India, Japan, Korea, Mexico, Russia, South Africa and Turkey posted a robust growth of 36.21 per cent in the first half of the current fiscal year, riding mainly on enhanced cash incentive and initiatives of exporters to diversify their markets.

For the first half of FY2018-19, apparel exports to Japan stood at $547 million, the highest in non-traditional export destination category, up by 50.62 per cent from $363.31 million in the same period of FY2017-18. Apparel exports to Australia were the second-highest with a growth of 18.46% to $360 million in FY2018-19 from $304.24 million in FY2017-18.India was the third largest market for apparel products from Bangladesh during the period, fetching $270 million, up by 143.30% compared to $111.33 million in the same period of FY2017-18.

Trade experts and industry stakeholders cited policy support measures from the government and increased cash incentives against export to non-traditional markets as the main drivers for the sharp rise in export earnings from new export destinations.

As Mohammad Hatem, Managing Director, MB Knit Fashion revealed apparel exporters now enjoy 4 per cent cash incentives against export to non-traditional markets, which encourages them to explore new destinations for their products. Additionally, these incentives allow apparel makers to practice competitive pricing in the global market. Bangladesh’s government raised cash incentives against export to non-traditional markets to 4 per cent this fiscal year from 3 per cent in FY2017-18, with an aim to boost exports to new markets.

Exhibitions help brands establish contacts

Shahidullah Azim, Former Vice President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA)Rise of non traditional markets fuels apparel exports 002 points out manufacturers are now participating in several expos to establish contacts with buyers from non-traditional markets. This is impacting the growth export earnings from new export destinations. In the next few months, export earnings from non-traditional markets are likely to rise as China and India are importing clothing products for local consumption and global retailers are opening new outlets in India.

Forming associations for bilateral agreements

The improvement in safety standards in Bangladesh’s ready-made garment (RMG) factories, and buyers’ relocating their sourcing destinations has also caused export earnings to increase. To retain this growth momentum, Bangladesh has to identify buyers’ priorities and design a strategy to develop its product basket to cater to buyers requirements.

Exporters Association of Bangladesh (EAB) believes exports to new destinations to be a reflection of buyers’ confidence, which has been boosted by improved safety standards in the industry. The association urged the government to work for more bilateral negotiations and trade agreements to avail duty-free access to markets with high tariffs.

Knitwear leads, policy measures and cash incentives drive growth of EU

Likewise, the European Union also indicates that earnings from apparel products from non-traditional countries reached $2.90 billion, up from $2.12 billion in the previous fiscal year (FY2017-18). Of the total amount, knitwear products earned $1.44 billion, which was 29.52 per cent higher than $1.11 billion in the corresponding period of FY2017-18. Woven goods fetched $1.45 billion, up by 43.58% from $1.01 billion in the first half of the previous fiscal year. Total apparel exports of the country saw a 15.65 per cent growth to $17.08 billion in the same period of the current fiscal year.

 
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