Home textile exports lag nearly 10 percent behind the target in July, which industry insiders say is a consequence of global recession and the energy crunch in the country.
Export Promotion Bureau (EPB) data shows Bangladesh fetched $42.41million from the item's exports in the first month of the current fiscal year against the monthly target for $46.88 million.
The home textile export target fixed for the entire fiscal 2010-11 is $563.50 million. A year earlier, the earning was $402.49 million.
Meanwhile, growing domestic demand for the item has prompted many manufacturers to market the product locally.
Nurul Afsar, the company secretary to Noman Group, Bangladesh's largest home textile maker, pointed to global recession, price pressure from international buyers, hikes in the prices of cotton, yarn and other raw materials as the main reasons for the declining trend in home textile exports.
Afsar also said an inadequate supply of gas and power to industrial units severely hampers production, which forced many to generate energy by alternative means resulting in a rise in the cost of production.
"The profit margin has declined, but the production cost has increased significantly over the last few years. As a result, many small players have already stopped exporting the item and started selling the products in the ready domestic market," he said.
Losing competitiveness on the global market, home textile makers are paying more attention to the marketing of the product at home, the Noman Group official said.
The company, with a production capacity of 5 lakh metres of home textile a day, has also diversified the product for enhancing price competitiveness.
Noman Group exports more than $15 million a month, but the profit margin is low nowadays, Afsar said.
However, Edward Mokronosov, business development manager of Swedish retail chain IKEA Bangladesh, said he has increased both the price and purchase volume of home textile from Bangladesh to adjust with the increased demand and higher cost of raw materials.
"Such increase is 12 percent in a period between September 2009 and August 2010,” he said.
The demand for quality home textile from Bangladesh is higher in the exporting countries, but the problem lies in the production level for energy crunch, he added.
"We could have purchased the item two to three times higher than from the present purchasing level, provided an uninterrupted supply of gas and power to the industrial units and good water treatment plants are ensured."
The IKEA place orders to the factories that are able to supply the products on time and has good water treatment facilities, Mokronosov said.
According to Bangladesh Textile Mills Association, more than 469.7 million metres of home textile are now produced a year.
Source: The Daily Star, Thursday, September 23, 2010 by Refayet Ullah Mirdha (Email: reefat@thedailystar.net)
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