Purchase orders returning brings relief to RMG sector
Published: 14:26 6 August 2020 Updated: 18:41 6 August 2020
Purchase orders returning brings relief to RMG sector; File Photo
Due to the Covid-19 prevalence, the world's leading brands canceled, suspended or reduced purchase orders, resulting in the adverse effect on the garment industry, the main export product of Bangladesh. The export volume of garment products went down in April this year – the amount was $37 crore which was the lowest in decades of history. However, the export earnings increased steadily in May and June.
According to the Export Promotion Bureau (EPB), garment exports in March this year stood at $225 crore – which was 20 percent less from the previous year. Exports in April were $37 crore. The revenue in May stood at $123 crore.
In June this year, the revenue increased to $224 crore, however, garment exports are still in negative growth compared to the previous year. Negative growth in June was about 6 percent. As a result, Bangladesh earned $324.49 crore from the ready-made garment (RMG) industry in July.
Besides, it has exported RMG products worth Tk 2,794.91 crore ($27.94 billion) in the 2019-20 fiscal year – which was 84.20 percent of the total export income of the country.
According to BGMEA, at least 80 percent of the suspended export orders have returned due to coronavirus. New purchase orders are also coming from other countries. For example, a large part of the purchase orders is coming to Bangladesh due to receding from China and Turkey over coronavirus.
The demand for clothes is high in the western world on the occasion of Christmas and New Year. Therefore, there is a possibility of more new purchase orders in the RMG sector, said the garment sector concerned. However, the incentive fund announced by the government is also playing a significant role in turning things around.
About this, BGMEA vice-president Arshad Jamal Dipu said, “We are giving the rescheduled orders. New orders are coming in, but very little in comparison. We have to wait till September to understand the overall situation,” he added.
Mohammad Hatem, first vice-president of BKMEA, said, “We exported some of the earlier orders in May-June. However, the orders did not come to compare to the work we will do in the next two to three months.”
Exports will increase in May-June-July but will decrease in August-September. We think new orders will come in October-November, said the business leader, commenting that the sector is trying to turn around.
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