Garment exports to US dips by 11pc

Himalayan News Service

Kathmandu, April 6:

Readymade garment exports from Nepal to the United States in the month of March 2004

has dropped by 11 per cent, compared to the corresponding period last year.This is the third consecutive month that Nepali garment exports to the US experienced a fall, which absorbs about 85 per cent of the total garment exports from Nepal. Export of the largest foreign currency earning commodity is suffering a fall from the very beginning of the year, as exports declined by 31 per cent and 41 per cent respectively in previous two months.

Garments valued at more than $10.63 million were exported in March 2004, while it was over $11.94 million last year, reveals figures provided by the Garment Association of Nepal (GAN), today. Unlike to the US, garment exports to Canada, though it consumes only a small fraction of the total exports, went up during the month. According to the GAN figures, exports to Canada soared by 27.13 per cent in March, against exports recorded during the same period in 2003. According to GAN statistics, Nepal exported garments worth $122,563.29 to Canada during the month, a rise from $96,410 in 2003. Last month, too, exports had increased by 27.89 per cent. Likewise, the figure for garment exports to the European Union (EU) shows an encouraging scenario with a continuous growth. Export of the largest foreign currency earner to EU registered a growth of a remarkable 84.29 per cent during the period. It had gone up by 16 per cent in March 2003.

Readymade garments exports to the EU in March 2004 amounted to over $2.41 million against $1.13 million during the same period last year. The European market has emerged as a promising market for Nepali garment and apparel products over the last two years.

According to quantitative analysis of garment exports to the US, altogether 11,169 kg of the commodity was exported during the month, whereas the figure was 16,176 kg in 2003.

“The current fall is mainly due to deteriorating law and order situation in Nepal, which has diverted buyers to neighbouring countries and sub-Saharan and Caribbean nations,” Kiran Prakash Sakha, president of GAN told this daily. “Tough days are ahead for Nepali garment exports to the US, as multi-fibre agreement (MFA) will be phased-out after 2005. It means that the Nepali industries have to face a cut-throat competition with international market players,” he said.

Industry insiders underline the need for diversifying the garment market to sustain domestic industries in the long run. “EU and Canada are emerging as potential markets and we need to reap an optimum advantage from these duty-free markets,” they said. Unless Nepal gets a duty and quota-free access for exporting Nepali readymade garments, export is unlikely to increase, opined Sakha.

Despite exporters having been lobbying for duty-free access for Nepali readymade garments to the US market, it has not been through yet and the act for duty-free access is yet to be passed by the US Congress. The proposed bill will grant Nepali garments duty and quota-free status, waiving the current average import duty to 13-14 per cent, till September 30, 2005, once it is passed.