KATHMANDU, Nov 26: Export of readymade garments (RMGs) has dropped by a whopping 30.7 percent during the first quarter of 2012/13, compared to the same period last year, as protracted economic woes in major markets like the US and Euro Zone hit its demand.
Trade and Export Promotion Center (TEPC), the government agency that compiles the official trade data, stated that Nepal exported 2.86 million units of RMG worth Rs 1.04 billion during the first quarter of this fiscal year, whereas it had exported a total of 4.54 million units of apparels valued Rs 1.5 billion in the overseas market during the same period last year.
Traders attributed the decline in the RMG export to the slackening of demand in Europe and the US where economies are recording weak performances since the last couple of years.
“Amid prolonged economic slowdown, European and US importers are not placing much orders for RMGs -- which are not the priority products for consumers there,” said Yagya Pokharel, who has been exporting garment products to the European markets for last few years.
Pokharel, who is also proprietor of United Fashion, a leading exporters of garment to Europe, also added that increasing flow of comparatively cheaper products from other source countries too led to a decline in demand for Nepali products in the Western markets.
“China, which is major exporter of garments to the US, is providing cheaper prices and has replaced the products from small exporting countries like Nepal,” Pokharel further added.
Uday Raj Pandey, president of Garment Association of Nepal, an umbrella body of Nepali apparel producers and exporters, said sluggish economic performance in western countries and uncontrolled exports of low-grade RMGs from bordering areas to India dragged down the overall exports of garments.
Despite nominal cases of labor unrest in the country for last few months, the exports of RMG suffered major drop indicating that Nepali exporters are facing tough time ahead to reclaim their previous markets, mainly in the Western countries.
Downfall of Nepali RMG started from end of 2004, when the US, the key market, stopped granting duty-free-quota-free access which led to the massive slowdown in the apparel production with the mass closure of garment factories across the country.
During the fiscal year 2011/12, Nepal exported RMG worth Rs 4.05 billion, 0.6 percent down from earlier year. Export of garments had risen to a record Rs 12 billion during the fiscal year 1999-2000 on the back of impressive international demands.