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Bangladesh: RMG exports decline in July

Bangladesh garment exports fell in July compared to a year earlier. This is mainly due to the political crises and the industrial disasters last year, which dented the confidence of international retailers.

In the first month of the current fiscal, export of woven items declined by 4.14 per cent compared with the same month last year. In August 2012, exports of woven items declined by 12 per cent and knitwear products by 24 per cent. Bangladesh’s garment industry performed well even in the global financial crisis in 2007 and 2008 with higher exports of basic garment items worldwide.

Garment exports were badly hampered in October, November, December 2013 and January 2014. Along with massive disasters in the sector, production cost increased by nearly 15 per cent with the appreciation of local currency against the dollar. Another cause of concern for the Bangladeshi garment sector is the higher bank interest rate, which has been eating up the marginal profit of garment makers. And in some cases buyers bargain for squeezing prices further.

In July 2014, overall export earnings went down by 1.37 per cent and were 2.03 per cent less than the target. Other problems are the inadequate supply of gas and power in industrial units and the poor condition of the Dhaka-Chittagong highway.