Garment exports plummet

Kathmandu, November 7:

Export of Nepali readymade garments to US continued to suffer a massive decline for the 10th straight month, as it plummeted by 48 per cent in October 2005, compared to the corresponding month last year.

With termination of multi-fibre arrangement (MFA) from January 1 that elapsed the quota system on exports to the US, exports have been dwindling and the trend is expected to worsen in the coming months.

Nepali apparel products, which were enjoying duty free market access to US prior to MFA termination, witnessed a huge fall of 30 per cent in 2004.

Doldrums in garment exports began with a whopping decline of 46 per cent in January, which further expanded to 55 per cent in February. Exports didn’t improve, as it fell by 41 per cent and 15 per cent in March and April, respectively. The negative export figures stood at 50 per cent in May, 18 per cent each in June and July and a massive fall of 62 per cent in August, which followed by a 43 per cent decline in September. As US alone absorbs more than 80 per cent of total exports to Nepal, the single market concentration is also blamed to be the reason for such a huge plunge. Exports to US had suffered almost throughout 2004, except a brief progress made in the month of October 2004.

Garment and apparel products valued at over $2.59 million were exported to US during the month, whereas garment products worth over $4.96 million were exported last year, reveals the latest figures provided by Garment Association of Nepal (GAN). The fall in exports indicates a difficult time ahead for Nepali garment exporters, as the world’s biggest apparel market US, has now been opened for all competitors without quota restrictions.

Building up competitive stre-ngth in terms of price and quality has become a ‘must do’ for the Nepali readymade garment sector, if it has to survive the competition. As many internal factors and other non-tariff bar-riers such as social complian-ces, procedural complications, lengthy customs process and documentations, are said to be reasons for making apparels dear and less competitive, compared to regional competitors like India, China and Pakistan.

Exports to Canada have recovered, as the total export value of readymade garments registered a marginal increment of 2.43 per cent during the month compared to the preceding year. Despite Nepal being a lea-st developed country, which enjoys duty and quota free market access to Canada, this increment is minimal.

According to GAN, readymade garment products worth $7261.96 were exported to Canada during the month, against last year’s export of $70,642. Exports had plunged heavily by about 64 per cent last month. This trend indicates that besides enhancing the competitive strength, diversification of markets and products has remained a major challenge for Nepali garment exports.