Bangladesh garments exports up 42% to $ 14 b

Tuesday, 10 May 2011 00:00 - - {{hitsCtrl.values.hits}}

Demand for garments from new markets growing

DHAKA (Reuters) - Bangladesh’s exports surged 45.56 percent in April from a year earlier to $2.036 billion, boosted by ready-made garments sales, helped by a continuing shift in production from China to the lower-cost South Asian country.

Exports for July to April, the first 10 months of the 2010/11 fiscal year, were up 40.88 percent at $18.24 billion, close to full-year targets of $18.5 billion, the Export Promotion Bureau said on Monday.

Garments exports surged 42 percent to $14.17 billion in July-April.

Exports of ready-made garments to Europe and the United States, which constitute close to 70 percent of total overseas sales, have been growing since last year on the back of the global economic recovery.

Officials said the soaring figure reflected the lower wages that have attracted some clothing production away from China.

Orders are also growing from new markets such as Japan, South Africa, Canada, China, Australia and New Zealand.

Bangladesh’s cheap labour costs have helped it join the global supply chain for low-end textiles and clothing.

The country last year nearly doubled the minimum monthly wage for millions of workers in the garment industry to 3,000 taka ($42) but salaries are still low compared with rival manufacturing centres such as China, India, Vietnam, Thailand and Cambodia.

Bangladesh makes garments for international brands such as JC Penney , Wal-Mart , H&M , Kohl’s , Marks & Spencer and Carrefour .

Esprit Holdings Ltd, Asia’s No.3 garment retailer by market value which has a strong presence in Europe, said in February it would switch more sourcing to Bangladesh from southern China.

However, manufacturers fear that a severe power shortage would hold back the growth.

Garments are one of the main foreign exchange earners for Bangladesh’s $90 billion economy, along with remittances from Bangladeshis working overseas, many of whose jobs are now at risk due to the turmoil in the Middle East.

The government hopes to achieve a record 6.7 percent growth in the current fiscal year on the back of higher exports.

Bangladesh’s exports rose 4.11 percent to $16.20 billion in the previous fiscal year that ended in June 2010, below target.

The impoverished country grapples with high inflation and swelling trade deficits, driven by costly food and oil imports, that analysts said to jeopardise the economic growth.