Bangladesh Garment Manufacturers and Exporters Association (BGMEA) today said the export earnings target from readymade garments set by the government for the FY23 is unlikely to be achieved due to the high inflation in major markets and shortage of energy in the country.
"Export earnings target from RMG for the current fiscal year will not be achieved as global buyers have been placing the decreasing volume of orders due to inflation," BGMEA President Faruque Hassan said at a press conference held at the headquarters of the trade body at Uttara in the city.
Faruque said the demand for apparel has decreased in the major markets, including European Union and the United States, due to the high trend of inflation. At the same time, capacity remained unutilized in the RMG factories in Bangladesh due to the shortage of gas and electricity, he added.
"Unfortunately, the gas and electricity crisis are creating scope for the global buyers to think beyond Bangladesh," said the BGMEA president.
Faruque said the readymade garment exports in October might have registered nearly 20 per cent negative growth compared to that of the same month last year.
"I think the export earnings will also register negative growth in November . . . Under the circumstances it will not be possible to achieve the apparel export target for the current financial year due to the energy crisis, decline of work orders and high inflation in the major markets," he said.
The government has set export earnings targets from RMG of $46.80 billion for the fiscal year 2022-23.
The export earnings from RMG in FY 2021-22 stood at $42.61 billion which was 21.25 per cent higher than the government-set target of $35.14 billion, according to the Export Promotion Bureau (EPB) data.
"The ongoing crisis of gas and electricity has pushed the production cost high as manufacturers have been trying to continue their production through diesel-run generators," said Faruque Hassan.
The generators in factories are also being crippled due to its frequent usage, Faruque said, adding factory owners have been forced to negotiate orders with underpriced to pay workers' wages as the flow of orders decreased in recent months.
He demanded that the government should ensure uninterrupted gas and electricity supply for the export-oriented industries for the sake of foreign reserves and employment.
The BGMEA president also demanded reduce of export tax by 0.50 per cent from the existing 1 per cent as the production in the factories declined while the cost of production went up.
The BGMEA organised the press conference on the eve of the opening of the Centre for Innovation, Efficiency and OSH and on the present situation of the RMG sector.
Faruque said that the centre would help Bangladesh's RMG sector to transform its challenges into opportunities.
It would be possible to increase RMG export by $100 billion within 2030 and to generate employment for additional 10 million people through increasing competitiveness and traceability of Bangladesh's RMG sector.
BGMEA vice presidents - Md Shahidullah Azim and Khandoker Rafiqul Islam and directors - M. Khosru Chowdhury and Neela Hosna Ara, among others, were present at the press conference.
