Apparel exporters have called for supplying more gas and electricity to export-oriented industries to maintain export growth, hinting at undershooting the RMG export target due to power shortage and a fall in export orders.
“We urge the government to supply more electricity and gas to industries, especially the export-oriented ones because foreign currency reserves will bounce back if exports grow,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan told a press conference on Sunday.
“The earnings may fall in November if the energy supply situation does not improve and the Russia-Ukraine does not come to an end," he said.
The BGMEA president also informed that RMG factories are now running below the capacity because of power shortage, which has shot up production cost apart from creating the risk of shifting of orders to other countries.
“In this context, we might not be able to achieve the readymade garment export target set for the current fiscal year,” he said in reply to a question. The government has set the export target at $46.80 billion for FY23.
BGMEA suggested that the government may shift natural gas from electricity generation and gas-gobbling fertilizer production to industries to maintain the export growth.
Instead, the government may import LNG, the price of which has come down to $37 per MMbtu from $65 in global market alongside importing fertilizer to protect industries and jobs, it argued.
Recently, the issue of 9-6 percent interest rate in the banking sector has come into fore again after the visit of the IMF team that has suggested for raising interest rate as a condition for getting loan from the lender.
When drawn attention to this issue, Faruque said there must be an upper cap on lending rate otherwise small and medium entrepreneurs will fall in a big trouble at this crisis moment.
At the same time, the taka-dollar exchange rate should not be below the present Tk 99.5 rate, otherwise the apparel exporters may lose their competitiveness, he said, adding that the fall in taka’s value is also somewhat helping exporters to address production cost hike.
At the press conference, BGMEA leaders informed that they are trying to increase production of apparels with man-made fibre and trying to tie up with the leading Korean company in this regard.
The apex trade body has opened a Centre for Innovation, Efficiency and OSH to improve market driven skills in RMG sector and establish a link between academia and industry.