Apparel sector impacts on recent terrorism

Moody’s: Terror attack has long impact on Bangladesh economy
Global credit-rating agency Moody's Investor Service proposed in a recent analysis about the impact of terrorism that has been plaguing Bangladesh. The agency generally has "political risks", factored into govenrment bond rating calculation and so far the nation's vulnerability has been moderate. This is subject to change in the wake of recent developments.

The Agency, particularly focused on the investor confidence and external payments standing, through diminutive foreign direct investments, especially towards the main forerunner, garments exports. This sector and textile, contribute to over 80% of total export share. Both of these are vital for growth and are stimulated by FDI. 

Bond facilities - NBR policy changes

NBR plans policy changes to check misuse of bond facilities
To battle duty evasion exercised in bonded warehouse facilities the government has detected the incapacity in the existing system to deal with this. Thus, before the next fiscal, the NBR has planned initiatives to ensure bonded warehouse facilities are not extended to regular imports. It has planned to reduce or withdraw VAT on the items under this facilities. Only the 5% duty will be kept and the 15% VAT will be abolished.

Direct flight bans to the UK

DCCI calls for quick fix to ban on direct air cargo

Deep concerns for business as of March 8th, the UK banned direct cargo flights from Dhaka, reasoning Bangladesh not meeting international security requirements. Previously, Australia has done so too with similar complains during December 19, 2015.

Flights to the UK travel four times a week with domestic passengers and 25 tonnes of cargo each. Exports are US $3.2 bn and imports are US $330.72 million, to and from the UK. Garments and frozen fish consist mostly of the trade. Rerouting through Hong Kong, Singapore and Thailand will hike costs immensely.

UK ban not to hurt vegetables export much
Although this ban is of great concern, vegetable exports are not going to be impeded or made costlier, due to the traditional choice of non-direct flights for the category to the UK. Daily averages of 30-35 tonnes of veges consist of 40% to the UK and the rest to other global destinations.

"According to Export Promotion Bureau data, during July-February period of the current fiscal year, Bangladesh earned $2.46bn from exports to the UK, of which, $2.27bn were RMG products and $7.5m vegetables and other agricultural goods."

Jute hopes

Diversification needed to revive jute exports
Diversification, with innovation being taken into consideration should be the key factor to proper in the light of potential global demand for Jute products of Bangladesh. Furthermore, participation of manufacturers and analysis of the need of Jute in an international context are as vital. With nations and governments supporting "green", green products like for shopping bags, geo textile, pulp and paper are growing, while plastic is being frowned upon. Bangladesh is already operating with major crops being stocked in jute bags, by new law.

Booming export orders at DITF

DITF ends with record export orders
Exhibitors reject DITF export order claim

The Dhaka International Trade Fair 2016 ended on January 31st and its concluding statistics said the export orders received at the fair was an abnormaly mammoth one - a total of Tk 235 crore order, which is 176% more than that of last years at only Tk 85 crore. Although it is expected that foreign buyers are present in the fair every year, this time there has been a doubt about their presence. This constitutes a discripency in the statistics.

Some exhibitors expressed the lack of initiatives to attract foreign buyers. However, official sale statistics have been reported to be above Tk 121 crore, which was Tk 71 crore higher than previously. This has been acclaimed towards the prevalent political stability which was a sharp contrast during the last year's fair. With 22 countries participating, 553 stalls were allocated, 56 of which were foreign companies. Within 14 categories, 38 institutions were awarded of which, Walton Hi-Tech industries received the first prize in premier pavilion category.

The FBCCI has proposed that this sort of arrangement be held at all divisional levels as well.

Trade and facilitation

Exports accelerate to three-month high

Targeting to earn US$ 33.5 bn in the FY 2015-16, while already have earned US$ 31.2 bn in the last fiscal, Bangladesh’s export growth is on a 3-month high. In November, exports were US$2.75 bn. This was a 13.63% year-on-year growth, 16.7% higher than in October and unsurprisingly predominated by apparel.  The apparel sector has been shared the biggest portion of that amount, amounting to US$2.22 bn, which itself is up 23% from the preceding month and over 14% from last year. Despite this growth, businesses are cautious, not to take this growth for granted as recent buyer negotiations went through hiccups (cancelled Buyer’s Forum). Positive aspects are not afar, since depreciation will help the cause and hard work towards achieving better factory safety measures are continuously attempted.

Denim

Bangladesh: a rising star in denim sector

Event organizers are facing good amount of stress-load to find accommodation to house the participants of the denim expo in Dhaka next month. Too many international retailers have been showing interest to showcase their offerings in the 3rd edition of the Denim Expo, due to be held in Bashundhara International Convention City in November. 41 Retailers, designers and fabric makers will all come together to to produce a good show of their products. 27 are from abroad, from countries such as China, India, Pakistan, the US, Turkey, Singapore, Thailand, South Korea, Japan and Germany, most of whom was not aware of Bangladesh's Denim potential some time ago.

Leather and Jute

Leather sector's exports cross $1b for second year

Leather sector seems to be the only consistent sector in the economy among all the political and economic issues. Becoming the second largest sector in the economy, it amounted to US $1.13bn in 2014-15 similar to US $1.12bn in 2013-14. Consistency however, was still not enough to align perfectly with economic targets $1.4bn this fiscal year. Next fiscal of 2015-16, targets have been set at $1.21bn.

Bangladeshi leather exports have been doing well with India, Nepal, Australia and particularly Japan, for its duty-free policies. Exporters have considered our economy to maintain closer relations with Japan, so that this advantage remains despite many Asian countries signing free trade deals with them. Bangladesh exports 30% of leather produced to Japan. Of the total global leather exports, Bangladesh contributes 0.5%, worth of $215bn.

Mascot for Business

Bantora Kun launched in capital to bolster Japan-Bangla trade, cultural ties

A different kind of positive step has been taken by Japan to brighten the image of Bangladesh in Japanese people’s perceptions. A bright yellow Royal Bengal Tiger mascot has been launched by the Japanese business community, to promote Bangladesh and trade relationship with Japan. Naming the mascot with their own style of language, but with some Bangladeshi touch, it is called “Bantora”: ‘Ban’ referring to us and ‘tora’ meaning tiger.

Export health of Bangladesh

Exports to Japan will hit $2b by 2018: Tofail

Today we look at export situation of Bangladesh with a few partner countries

Doubling exports to Japan in the last five years, it could be crossing US$2 bn in 3 years ahead. Japan, opting for independence from Chinese trade, have been looking to countries such as Bangladesh to supply their domestic retailers for whom they allow duty-free access. Export consists of products of apparel, shrimp, leather and jute. Naturally, RMG has highest share (71.3%) and rising. In FY 2014-15, exports to Japan rose 6% to US$915.2 m, while imports stood at US$1.51 bn. Relations can be more in

RMG comebacks and challenges

RMG export shines in volume, pales in value

Low price offers from foreign buyers, devaluation of the Euro and rise in production costs make our RMG exports bleak, compared to the 58.17% rise from the last fiscal year of 2014-15. The volume posted was at 1.57 bn units exported earning a total of US $25.49 bn, a 4% rise. Knitwear and woven products scaled up 3.13% and 5% respectively. Improvement in productivity and technology is required to meet the devaluation in the EU and possible monopsony of buyers worldwide.

Big expansion plans of Business and Industry through more Economic Zones

BEZA plans to generate one crore jobs in 15 years

Bangladesh Economic Zones Authority BEZA, shares its longer period vision to set up 100 economic zones within Bangladesh in the coming 15 years. Planned on 37 different locations, these are expected to create 1 crore jobs, bringing in $40 bn from increased exports, by 2030.

Bangladesh’s big apparel exporting rival, Vietnam has developed 200 of such in the past 15 years. Considering such achievement, BEZA believes we can do our bits and has already granted entrepreneurship licenses, while planning quick development of infrastructure.

Garments, looking feeblest in months

Garment exports suffer biggest fall in nine months

With our recent update last week on RMG sector’s positive steps, this week we notice less than satisfactory improvements in highlights. It seems political mood swings were to blame, where firms failed to secure enough order placements during the usual time between December and March, coinciding with last season’s political roller coaster.

Garment exports fell by 12.78% for the monthly target of July, with a year-on-year decline of 11.96%. RMG also scored subpar on the yearly target, earning $25.5 bn when the crosshair was on $26.9 bn. This was a mere 4% fiscal year growth.

Generalized System of Preferences (GSP): Bangladesh's inclusion a possibility or a non-necessity?

Focusing not on GSP but on building export capacities

Recently the US has renewed the system of duty or tax-free imports into its economy from 122 other countries, termed Generalized System of Preferences (GSP), but not Bangladesh. Although the US stated Bangladesh has made progress in fire and safety precautions, additional modifications are needed, especially labor rights and harassment issues, which must be under the direction of the ILO, EU and other international associates thereby adhering to Sustainability Compact act. Controversially, the issue may be entirely US political, where Sri Lanka sustaining many good conditions, are still out of GSP.

The GSP only affects non-apparel exports which are the preferences of the US.