Garment exports have suffered a serious set back in the past three months but are expected to bounce back in October, said the president of the country’s knitwear association.

According to Fazlul Hoque, president of Bangladesh Knitwear Manufacturers and Exporters Association, export earning from garments fell 24 percent in July and it fell by 12 percent in August. In September year on year growth is expected to be zero, he said.

The Export Promotion Bureau has failed to release official export figures for July or August and both sets of statistics are now many weeks overdue. Sources say the information has been withheld due to government concerns about the slump in sales. Garment exports account for more than 75 percent of the country’s total exports.

Fazlul was more upbeat about exports in the remainder of 2007. “From October onwards the export growth will be more than 20 percent,” he said, adding that he based his assessment on information on orders among his members.

The downturn in exports was mainly a result of a lack of orders between December and March when the country witnessed political volatility followed by massive labour unrest. This frightened off buyers and stopped them from giving orders to Bangladeshi suppliers, he said.

Anwar-Ul Alam Chowdhury Parvez, president of Bangladesh Garment Manufacturers and Exporters Association, said an unusually warm winter in the Western and European countries last year also forced the major international buyers to reduce orders.

Buyers have also pointed to the weakening of the US economy, the poor performance of some of the country’s major buyers, such as Walmart, and increased competition from neighbouring Asian producers such as China, Vietnam and Cambodia as reasons behind the fall.

The export figures were raised at a discussion on ‘Bangladesh’s Apparel Sector in Post-MFA Period: A Benchmarking Study on the Ongoing Restructuring Process’ in Dhaka yesterday. The study was prepared by the Center for Policy Dialogue (CPD), an independent think-tank, in association with the International Finance Corporation (IFC)-SouthAsia Enterprise Development Facility (SEDF).

According to the study, garment factories that meet compliance standards are much more productive than less compliant competitors. “Highly compliant enterprises are 57 percent more productive than less compliant enterprises and 65 percent more productive compared to moderately compliant enterprises,” the study discovered.

The study was conducted during the second half of 2006 and the data was generated for FY 2004 (pre-MFA) and FY 2005 (post-MFA). A total of 190 enterprises were selected as sample.

Speaking at the event Finance Adviser Mirza Azizul Islam said compliance issues are essential requirements to sustain international markets. “Compliance should be ensured by all parties including enterprises, labour and government,” he said.

Moderating the function, CPD Executive Director Debapriya Bhattacharya said the companies that are new, big and backed by foreign investment or ownership are more compliant and have greater productivity. Small and medium enterprises are facing difficulties, he said.

The study said that between 2002 and 2006 the global market for apparels increased by about 45 percent whilst that of textiles by about 42 percent. Between FY 2000 and FY 2007 gross export earnings more than doubled, whilst net export earnings increased by almost two and half times.

The study said shortage of electricity, competition with China, inadequate port facilities and infrastructure, lead times, and non-implementation of new wage structures are the major structural weakness for the readymade garment sector.

Speakers said Bangladesh may face a renewed threat from its main competitor China when export limits imposed on the country are lifted in 2008. Vietnam, India, Pakistan, Sri Lanka and Cambodia are also emerging as major competitors to Bangladesh, they said.

CPD research fellows Mustafizur Rahman and Khondaker Golam Moazzem, IFC-SEDF Country Head Deepak Adhikary, Bangladesh Institution of Labour Studies President Nazrul Islam Khan, Nurul Islam of Trade Union Centre, and workers leaders Nazma Akhter and Ruhul Amin spoke at the function.