[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

Bangladesh’s garment export growth slows to 2.86pc amid economic challenges

The Export Promotion Bureau (EPB) has released export data for the fiscal year 2023-24, highlighting a slowdown in the growth of Bangladesh’s garment exports. From July to May of the 2023-24 fiscal year, garment exports totaled $43.85 billion, reflecting a growth rate of 2.86 per cent. This

thefinancialexpress.com.bd

Bangladesh's garment export growth slows to 2.86pc amid economic challenges
UNB
Published :
Jun 05, 2024 22:01
Updated :
Jun 05, 2024 22:09

The Export Promotion Bureau (EPB) has released export data for the fiscal year 2023-24, highlighting a slowdown in the growth of Bangladesh's garment exports.

From July to May of the 2023-24 fiscal year, garment exports totaled $43.85 billion, reflecting a growth rate of 2.86 per cent. This is a marked decrease compared to the same period in the previous fiscal year, when exports reached $42.63 billion with a growth rate of 10.67 per cent.

The decline in exports became particularly evident in April and May 2024, significantly affecting the overall growth rate.

"Our garment exports over these 11 months have lagged behind the target by 7.63 per cent," said Mohiuddin Rubel, Director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Rubel detailed that knitwear product growth dropped by 20.75 per cent and woven garment exports decreased by 12.48 per cent in May alone. He attributed this decline to several global and domestic economic pressures.

Due to inflation in the global economy and interest rate hikes to control it, consumers' purchasing power has diminished, leading to reduced retail sales and garment imports, Rubel explained. He noted that global garment imports by the United States fell by 7.18 per cent and by Europe by 12.84 per cent during January-March 2024. Additionally, significant price drops per unit of product in key markets, ranging from 8 per cent to 18 per cent, have exacerbated the situation.

Domestic challenges have also played a role. Increased minimum wages, rising costs of electricity, gas, and transportation, and bank interest rates soaring from single digits to 14 per cent-15 per cent, combined with reduced cash assistance, have hampered the industry's competitive edge. "This is somewhat reflected in the export growth," Rubel said.

It is noteworthy that the garment sector has to face continuous new challenges to survive. "On one hand, we are dealing with complexities related to NBR, ports, and banking. On the other hand, the government has decided not to provide gas-electricity connections and bank loans to any new factories outside industrial zones, a decision we have requested to be withdrawn. If implemented, such decisions could further hinder investment and exports," he added.

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[Saif]

Minimum tariff value of cotton fabrics increased

Finance minister Abul Hassan Mahmood Ali on Thursday proposed rationalising at the import level the minimum value of certain products, including cotton and synthetic fabrics, for imposing duty to safeguard the local industry...

www.newagebd.net

Minimum tariff value of cotton fabrics increased
Staff Correspondent 06 June, 2024, 22:10

| Star Mail photo

Finance minister Abul Hassan Mahmood Ali on Thursday proposed rationalising at the import level the minimum value of certain products, including cotton and synthetic fabrics, for imposing duty to safeguard the local industry.

The finance minister in his proposed budget for the financial year 2024-25 suggested increasing the minimum value of cotton fabrics and printed cotton at the import level to $4 a kilogram from exiting $3 a kilogram.

He also proposed increasing the minimum value of synthetic fabrics from $3 a kilogram to $4.50 a kilogram.

Waiving all other duties and taxes, the finance minister also proposed imposing 1 per cent customs duty on purified terephthalic acid and mono-ethylene glycol, the raw materials of polyester (synthetic) staple fibre and pet chips used in the textile industry.

The minister in his budget speech said that it was observed that the total tax incidence on the finished goods was less than its raw materials.

'In order to remove this discrepancy and for the protection of the domestic industry, I propose to impose 1 per cent customs duty on PTA and MEG and waive all other duties and taxes on these two raw materials,' Mahmood said.

The finance minister also proposed waiving all other taxes except customs duty of 5 per cent and advance income tax for importing chiller having capacity of 50 tonnes or more.

Chiller is used as essential capital equipment in various industries and a total duty of 104.68 per cent is applicable to the import of the item, which is not conducive to the related industries, he said.​

 

[Saif]

Textile, garment makers urge govt to reconsider their demands

Textile millers and garment makers in Bangladesh yesterday demanded that the government include some of their recommendations in the new national budget as many of the issues they raised remain unaddressed.

www.thedailystar.net

Textile, garment makers urge govt to reconsider their demands

Textile millers and garment makers in Bangladesh yesterday demanded that the government include some of their recommendations in the new national budget as many of the issues they raised remain unaddressed.

For instance, garment exporters had demanded the reduction of source tax from the existing 1 percent to 0.5 percent for the upcoming fiscal year, which starts on July 1.

They also sought the continuation of cash incentives on export receipts until 2032 as the World Trade Organization (WTO) will allow graduating least-developed countries (LDCs) to enjoy trade benefits as LDCs till then.

As these demands were left unmet in the proposed budget for FY25, the textile millers and garment makers have asked the government to reconsider their recommendations on the grounds that such measures would improve businesses.

SM Mannan Kochi, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said one of the proposed measures in the budget would allow customs officials to levy a 400 percent fine if an exporter is found using inaccurate documentation.

"Such a proposal will only increase the harassment of exporters for simply making a mistaking when filing documents for the export procedure," he added.

Kochi was speaking at a post-budget press conference jointly organised by the BGMEA, Bangladesh Textile Mills Association (BTMA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) at the BGMEA office in Dhaka.

The BGMEA president also demanded food rationing for garment workers as persistently higher inflation has increased essential commodity prices in domestic markets.

He also suggested the government introduce a special scheme for both saving and fostering the growth of small and medium enterprises in the textile and garment sectors.

BKMEA Executive President Mohammad Hatem said although the government takes advanced income tax, the amount charged is often not returned as per the rules.

Besides, many textile and garment factories are facing serious difficulties due to a severe gas crisis.

BTMA President Mohammad Ali Khokon said there is an opportunity to bolster earnings from the 15 million kilogrammes of garment waste generated across the country each year as many global buyers want apparel made from recycled materials.

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[Saif]

Go for recycled garments to boost exports

Bangladesh should soon go for producing recycled garment products that meet global environmental safety standards to increase its exports to the European Union (EU), according to speakers at an event.

www.thedailystar.net

Go for recycled garments to boost exports
Experts say at BUILD discussion

Bangladesh should soon go for producing recycled garment products that meet global environmental safety standards to increase its exports to the European Union (EU), according to speakers at an event.

Changes in trade patterns often bring major shifts to a country's economic structure, technological advancement, government policies and emerging trade theories or agreements, they said.

However, Bangladesh needs to take adequate preparation to this end, they added.

These comments came at a discussion on the impact of EU circular textiles policies on its trading partners, organised by the Business Initiative Leading Development (BUILD) at its office in Dhaka.

The recently introduced EU Strategy for Sustainable and Circular Textiles emphasises transparency, sustainability and circularity across the textile value chain, impacting both the EU and non-EU consumers and companies.

The EU is an important destination for garment and textile exports from Bangladesh.

In fiscal 2022-23, apparel exports from Bangladesh to the EU amounted to $28.6 billion. In fiscal 2023-24, the amount was $25.44 billion, indicating a year-on-year decline of about 6.07 percent.

The EU and UK account for more than 60 percent of Bangladesh's garment exports while apparel products constitute more than 93 percent of the total shipments.

Ferdaus Ara Begum, chief executive officer of BUILD, said Bangladesh needs to devise new strategies and projections for textile exports to the EU. This includes identifying potential growth areas as well as challenges for market entry.

She said Bangladesh also needs to analyse the policy shifts and chart out a detailed scenario to support its textile and garment industries to adapt to the EU's sustainable and circular strategy.

"We need to assess the landscape of the sector before we provide feedback on potential impacts and necessary adaptations," ‍said Patrick Schroeder, senior research fellow of the environment and society programme at The Royal Institute of International Affairs, a British think-tank.

"And we need to figure out strategies for enhancing collaboration between EU and Bangladesh stakeholders to promote a sustainable and circular global textiles sector," he added.

Producer countries like Bangladesh have existing circular practices and entrepreneurship, often in the informal sector having market structures, micro enterprises and trade for pre-consumer textiles (garment waste or Jhut).

"So, the EU should take a proactive, supportive, and collaborative approach with stakeholders to formalise the Jhut sector while preserving livelihoods," he said.

The garments sector in Bangladesh is already facing a crisis given the tight margins and slowdown in global demand. However, local entrepreneurs in the sector would finance the required investment for the developing a circular economy, said Asif Ibrahim, chairman of Chittagong Stock Exchange PLC.

Saleudh Zaman Khan, vice-president of the Bangladesh Textile Mills Association, said producers need to consider developing a supply chain for cotton recycling and form local regulations for recycling.

Chowdhury Liakat Ali, director for the sustainable finance department of Bangladesh Bank, said they have taken various policy initiatives to promote sustainable finance and green banking to reduce greenhouse gas emissions and speed up investments in renewable energy, energy and resource efficiency, the circular economy and eco-projects financing, etc.

He added that the central bank fixes disbursement targets for banks with 15 percent of all loans and investments set for green financing and 20 percent for sustainable financing.​

 

[Saif]

Textile millers seek central bank intervention over unpaid $35 million

Textile millers have sought the central bank's intervention to secure payments for raw materials supplied to apparel exporters under back-to-back letters of credit (LCs) opened by commercial banks. Bangladesh Textile Mills Association (BTMA) said the banks are withholding over $35 million owed to

thefinancialexpress.com.bd

Textile millers seek central bank intervention over unpaid $35 million
Published :
Jun 13, 2024 20:48
Updated :
Jun 13, 2024 20:48

Textile millers have sought the central bank's intervention to secure payments for raw materials supplied to apparel exporters under back-to-back letters of credit (LCs) opened by commercial banks.

Bangladesh Textile Mills Association (BTMA) said the banks are withholding over $35 million owed to some 52 textile mills despite having issued maturity dates.

The BTMA, in a letter to the Bangladesh Bank (BB) on Thursday, said that after submitting buyers' acceptance and other related documents, including negotiating papers, the LC-opening banks have yet to make payments.

BTMA President Mohammad Ali Khokon signed the letter addressed to BB Deputy Governor Abdur Rouf Talukder.

"The BTMA member mills -- local fabric and yarn manufacturers -- have been facing severe liquidity crisis due to huge overdue payments, while many have been at risk of facing crisis," the letter read.

According to BTMA data, payments worth $35.86 million for the supply of yarn and fabric from 52 mills remained overdue.​