Readymade garment exports to US drop

Kathmandu, October 5:

Exports of Nepali readymade garments to the United States, which is the single largest market, suffered heavily yet another month, as September saw a decline of 34 per cent in terms of value.

It is the consecutive ninth month in this year that the exports of Nepali textile and apparel products have lost its beat. The garment exports to the US has been suffering from the very beginning of this year, as it witnessed a whopping decline of 54 per cent in January, 64 per cent in February, 47 per cent in March, three per cent in April, 63 per cent May, 42 per cent in June, 45 per cent in July and 27 per cent in August.

The industry is already in doldrums for the last couple of years with the crisis deepening further following the termination of quota regime under the Agreement on Textiles and Clothing (ATC) from January 1, 2005.

The exports had suffered a loss of 30 per cent in 2004 and 41 per cent in 2005. However, it slowed down with a marginal drop of six per cent in 2006. As the US alone absorbs more than 80 per cent of the total Nepali garment exports, single country concentration is blamed to be one of the major reasons for the fall.

The garments and apparel products valued over $2.17 million were exported to the US in September 2007, whereas the garment products worth over $3.29 million were exported in the corresponding month last year, reveals the figures provided by the Garment Association of Nepal (GAN), today.

The continuous fall in exports indicates that the Nepali readymade garment industry is gradually on the verge of a collapse, as the global markets have already been opened for all the competitors without quota restrictions.

An industry insider stressed on the need to enhance competitive strength in terms of price and quality of the domestic products to compete with big suppliers from India and China and other fervent players like Bangladesh, Sri Lanka and Cambodia.

Besides building up the competitive strength, diversification of both the markets and products has remained a major challenge for Nepali garment manufacturers and exporters. While analysing the quantity of garments, Nepal exported during the month, it dropped from 8267.3-kg in September 2006 to 2795.96-kg this year.

A gradual increment of the exports to European market and Canadian markets has shown a ray of hope to the garment manufacturers and exporters. These two big and potential markets have already provided duty free access to the exports from the least developed countries (LDCs) including Nepal.

However, Nepal’s share of garment exports to these markets is still as low as 20 per cent of the total exports.