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Bangladesh: Exports to Canada dropFriday, January 23, 2015 > 09:39:18
(The Financial Express)
The country's exports to Canada dropped by 15.40 per cent during the first half of current fiscal year following some industrial accidents, coupled with devaluation of Canadian currency against US dollar.
The country fetched $471.26 million from Canada during the July-December period of fiscal year 2014-15, compared to $543.86 million in the same period of FY 2013-14, according to official data.
Apparel products are the main items being exported to the Canadian market. Shipment of garment items was valued at $425.88 million, marking a 14.60 per cent negative growth in the same period.
Exporters attributed the recent tragic industrial accidents and last year's political turmoil to the decline.
But a trade analyst said devaluation of Canadian currency against US dollar and a declining demand in the country have impinged on Canada's imports.
In the clothing segment, woven export fell by 11.31 per cent with earnings at $ 243.54 million, and knit products witnessed 18.63 per cent negative growth during the first half, according to data.
Bangladesh's apparel export to Canada, the sixth largest market for locally-made garment products, reached $1.0 billion in 2013-14 fiscal year from $595.55 million in fiscal 2009-10.
Bangladesh-made garment products witnessed an impressive growth in the Canadian market in the last couple of years.
"Canadian buyers are in a wait-and-watch situation due to Rana Plaza building collapse as some buyers sourced from the factories located in the building," Md Shahidullah Azim, Managing Director of Classic Fashion Concept Ltd, told the FE.
Moreover, they were also under pressure for compensation. This also resulted in a decline in orders, he added.
Md Atiqul Islam, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, Bangladesh is losing its competitiveness because local currency is stronger against US dollar compared to that of other competitor countries like India and Vietnam.
Buyers prefer sourcing from the destinations that offer a competitive price, he said.
Moreover, buyers are reluctant while some of them have already stopped placing orders in shared or rented buildings, especially after the Rana Plaza incident, which affected the apparel exports.
Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association, (BKMEA) said the confrontational political situation, especially during the last three months of 2013, had badly affected the sector as orders declined during the period.
However, Shubhashish Bose, vice chairman of the Export Promotion Bureau, said, Bangladesh's export to Canada did not decline in terms of volume but in terms of value during the period.
Earnings declined following the price cut of cotton and yarn in the international market, he said explaining that product prices depend on those of raw materials.
Khondaker Golam Moazzem, additional director of the Center for Policy Dialogue (CPD) said the Canadian dollar lost its value against the greenback in September-to-December period, making Canadian import costlier not only for Bangladesh, but also for other countries.
But, local currency was slightly in strong position compared to those of India, Vietnam and Indonesia, main competitors of Bangladesh-made apparel products.
"Bangladeshi exporters might not get the same advantage as taken by the competitor countries in this respect," he added.
Moreover, the recent slowdown in Canadian economy has also affected the consumers' purchasing capacity and resulted in a slow demand, he added.