bdnews24.com :
Bangladesh exporters are threatened by the ongoing political turmoil that disrupts production and delivery schedules, but a falling Euro is compounding their woes.
Returns from exports to European Union has dropped sharply-a dozen apparels sold in Germany a year ago for 100 Euros would fetch TK 10,700 against TK 8,850 now.
Even six months ago, this consignment was worth TK 10,300.
One Euro was worth TK 107 on 23 February 2014, but it is now down to TK 8,850.
Even six months ago, one Euro was worth TK 103, according to data available with Bangladesh Bank’s forex department.
Six months ago, one Euro was worth one US dollar 32 cents but now the exchange rate is down to one dollar 14 cents for a Euro.
The Taka has also appreciated against the Euro rather sharply.
The drop in Euro value to Taka has been 16 percent in the last six months and 21 percent over the past one year.
“For garment exporters, it is like from frying pan to fire,” says former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) chief Anwar Ul Alam Chowdhury Parvez.
“The violent politics has made us desperate and now this relentless drop in Euro value is squeezing our incomes.”
The European Union is the biggest market for Bangladesh’s garment exports, which enjoys preferential trading status there.
Parvez said more than 20 percent of Bangladesh’s exports are to EU countries. “Except the UK, trading with all other European countries like Germany, France, Belgium, Italy and Netherlands is done in Euro. So a falling Euro hits our incomes.”
He said the violent politics is tainting Bangladesh’s image abroad. “Buyers are not placing fresh orders and the Euro is falling. We anticipate a huge adverse impact on our exports unless the situation changes.”
Parvez however pointed out that textile machineries imported from the EU countries was costing less. “That’s a plus.”
These Euro Zone countries prefer to import mostly knitwear and sweaters from Bangladesh, according to the former BGMEA chief.
Former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Fazlul Haque told bdnews24.com that they earned Tk 10,800 by exporting worth 100 Euros seven to eight months ago.
“Now we are getting Tk 8,300 only. We have to export garments worth 1.2 Euro to get what we got beforehand by exporting garments worth one Euro,” he said.
Private research body Centre for Policy Dialogue (CPD) Executive Director Mustafizur Rahman said, “Euro is getting weaker against both Dollar and Taka and that is impacting our exports negatively.”
Export Promotion Bureau (EPB) analysis shows that more than 30 percent of Bangladesh’s export earning comes from the European markets. The Euro Zone countries contribute 20 percent of this in Euro.
The Euro Zone is in severe recession over the Greek debt that is driving down the Euro against the dollar and other currencies.
Bangladesh has set a target to earn $ 33.2 billion by exporting goods in the 2014-15 fiscal.
Bangladesh exporters are threatened by the ongoing political turmoil that disrupts production and delivery schedules, but a falling Euro is compounding their woes.
Returns from exports to European Union has dropped sharply-a dozen apparels sold in Germany a year ago for 100 Euros would fetch TK 10,700 against TK 8,850 now.
Even six months ago, this consignment was worth TK 10,300.
One Euro was worth TK 107 on 23 February 2014, but it is now down to TK 8,850.
Even six months ago, one Euro was worth TK 103, according to data available with Bangladesh Bank’s forex department.
Six months ago, one Euro was worth one US dollar 32 cents but now the exchange rate is down to one dollar 14 cents for a Euro.
The Taka has also appreciated against the Euro rather sharply.
The drop in Euro value to Taka has been 16 percent in the last six months and 21 percent over the past one year.
“For garment exporters, it is like from frying pan to fire,” says former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) chief Anwar Ul Alam Chowdhury Parvez.
“The violent politics has made us desperate and now this relentless drop in Euro value is squeezing our incomes.”
The European Union is the biggest market for Bangladesh’s garment exports, which enjoys preferential trading status there.
Parvez said more than 20 percent of Bangladesh’s exports are to EU countries. “Except the UK, trading with all other European countries like Germany, France, Belgium, Italy and Netherlands is done in Euro. So a falling Euro hits our incomes.”
He said the violent politics is tainting Bangladesh’s image abroad. “Buyers are not placing fresh orders and the Euro is falling. We anticipate a huge adverse impact on our exports unless the situation changes.”
Parvez however pointed out that textile machineries imported from the EU countries was costing less. “That’s a plus.”
These Euro Zone countries prefer to import mostly knitwear and sweaters from Bangladesh, according to the former BGMEA chief.
Former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Fazlul Haque told bdnews24.com that they earned Tk 10,800 by exporting worth 100 Euros seven to eight months ago.
“Now we are getting Tk 8,300 only. We have to export garments worth 1.2 Euro to get what we got beforehand by exporting garments worth one Euro,” he said.
Private research body Centre for Policy Dialogue (CPD) Executive Director Mustafizur Rahman said, “Euro is getting weaker against both Dollar and Taka and that is impacting our exports negatively.”
Export Promotion Bureau (EPB) analysis shows that more than 30 percent of Bangladesh’s export earning comes from the European markets. The Euro Zone countries contribute 20 percent of this in Euro.
The Euro Zone is in severe recession over the Greek debt that is driving down the Euro against the dollar and other currencies.
Bangladesh has set a target to earn $ 33.2 billion by exporting goods in the 2014-15 fiscal.
