Readymade garment exports to US plunge

Kathmandu, August 7:

Export of Nepali readymade garments to the United States, which is the single largest market for Nepali garment exports, suffered heavily for yet another month, as the month of July 2007 saw a massive decline of 45 per cent in value terms.

It is the seventh consecutive month this year that export of Nepali textile and apparel products have lost ground. Garment exports to US has been suffering from the very beginning of the 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 in May and 42 per cent in June.

The industry has been in the doldrums for the last couple of years, with its suffering deepening further following the termination of quota regime under the Agreement on Textiles and Clothing (ATC) from January 2005.

Exports had suffered a loss of 30 per cent in 2004 but rose by 41 per cent in 2005. It slowed down with a marginal drop of six per cent in 2006. As US alone absorbs more than 80 per cent of the total Nepali garment exports, single market concentration is blamed to be one of the major reasons for such a plummet.

Garments and apparel products valued at over $2.15 million were exported to the US in July 2007, whereas garment products worth over $3.90 million were exported in the corresponding month last year, reveals figures provided by the Garment Association of Nepal (GAN), today.

A continuous fall in exports indicates a very tough time ahead for Nepali garment manufacturers and exporters, as global markets have already been opened for all competitors, without quota restrictions.

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

According to a quantitative analysis, altogether 1871.33 kg of the commodity was exported during the month, whereas the figure for July 2006 stood at 16951.5 kg.

Besides building up competitive strength, diversification of both the markets and products has remained a major challenge for Nepali garment exporters.

A gradual increment in exports to European Union and the Canadian markets has lit a ray of hope for garment manufacturers and exporters.

These two big markets have already provided duty free access to exports from 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 its total exports.