Home ›› 13 Dec 2022 ›› Front
Amid the tremendous apparel export growth in the first five months of this fiscal year despite the global economic crisis, textile millers are seeking more facilities from the government, including the continuation of the existing Export Development Fund (EDF).
They say these facilities are needed because of a downturn in their business despite the apparel export growth.
Their other demands include not classifying loans until June 2023 even if instalments are not repaid, not reducing the maximum EDF limit for individual factories, extending the EDF loan repayment deadline to 270 days, and including EDF in the foreign exchange reserve calculation.
They claimed their knitwear export orders are still low and buyers are deferring payments due to the ongoing economic crisis in the world. For this reason, they still have cotton and yarn worth around $3 billion in stock.
Bangladesh Textile Mills Association (BTMA) President Mohammad Ali Khokon placed the demands in a press conference at the apex textile body’s office in the capital on Monday.
The Export Promotion Bureau (EPB) data shows the country’s total export earnings were $21.95 billion in the first five months of this fiscal year and $18.85 billion (85.89 per cent) of that came from the home textile and apparel sectors.
The data also shows the apparel sector alone earned $18.33 billion during this period, which was 15.61 per cent higher year-on-year and also 4.36 per cent higher than the export target for this segment.
Besides, knitwear earnings rose by 12.55 per cent to $10.11 billion and that of woven jumped by 19.61 per cent to $8.22 billion year-on-year.
However, home textile earnings were down by 7.98 per cent to $518 million in the first five months of FY23 year-on-year.
Replying to a question, Khokon said data shows export performance was quite good but knitwear work orders are still low.
He said buyers are likely to place more orders after January. “Besides, due to the ongoing crisis, they are deferring payments. That is why we are seeking these facilities.”
The BTMA president said many experts have claimed EDF beneficiaries are misusing the fund and also suggested the support be stopped.
“We want to say we are taking out EDF loans in foreign currency and also repaying the same way after receiving export bills. If 4-5 per cent of the factories are misusing the facility, why will we take their responsibility? If the government reveals information about the misusers, we will take action.”
Khokon said the export sector has become competitive, thanks to the EDF support.
“If we have to open letters of credit by purchasing USD from banks, we have to spend an additional Tk 7 per dollar. How will we compete in the global market in that case?”
He said the government will borrow $4.5 billion from the International Monetary Fund (IMF) by complying with many tough conditions.
But if the apparel and textile sectors can earn an additional $11 billion through exports, the country will have more than the IMF fund that will come as value addition, he also said.
“If we can earn more foreign currency by using forex reserves, what is their (experts) problem?” Khokon questioned.
He said the ongoing gas crisis has improved a little but many factories are still suffering. “The authorities assured us it will be solved after January.”
In 1989, the central bank established a $300 million EDF to facilitate financing in foreign currency to support procurements made by manufacturers and exporters. The fund size gradually increased, reaching $7 billion in March this year.
The Bangladesh Bank had been including the EDF in the forex reserve calculation for long. But to comply with the recent IMF recommendations, the banking regulator now computes reserves excluding the EDF.
