October 9, 2013 / 12:37 PM / 5 years ago

UPDATE 1-Bangladesh Sept exports soar 36 pct on garment sales

(Adds quotes, details)

By Ruma Paul

DHAKA, Oct 9 (Reuters) - Bangladesh’s exports rose 36.26 percent in September to $2.59 billion from a year earlier, boosted by stronger clothing sales, according to government data released on Wednesday.

But some forecasts suggest growth will be less buoyant in the coming months as a spate of deadly accidents has hit the multi-billion-dollar garment industry and discouraged buyers.

Duty-free access to Western markets and low wages have helped make Bangladesh the world’s second-largest apparel exporter after China, with 60 percent of its clothes going to Europe and 23 percent to the United States.

In July-September, the first quarter of the financial year in Bangladesh, exports rose 21 percent to $7.63 billion from a year earlier, according to government data. Garments exports surged 24 percent to $6.2 billion.

Garment exports totalled $21.5 billion for the financial year that ended in June 2013, up 13 percent from a year earlier when total exports rose 11 percent to more than $27 billion.

But the industry, which supplies many Western brands, has been under a spotlight after a series of deadly incidents, including the collapse of the Rana Plaza factory complex in April that killed more than 1,130 people. A fire at another factory last year killed 112 people.

In the latest incident, seven people died in a factory fire on Tuesday night on the outskirts of Dhaka.

The Asian Development Bank, in a forecast issued last week, said overall export growth would slow to 7 percent during this fiscal year, versus the government’s projection of 12 percent.

“Export growth is projected to slow to 7 percent on an expected weaker expansion in garment exports because of some unfavourable buyer reaction in the aftermath of fatal factory fires...and the horrific factory collapse in April,” the ADB said in its latest Asian Development Outlook update.

Guy Ryder, director-general of the International Labour Organization, said the latest fire on Tuesday “reflects the sad and shocking truth that not enough is being done to address the safety and health of garment factory workers.

“Despite the staggering loss of life over the past years, workers are still dying for reasons that could well be avoided if decent working conditions were in place,” he said in a statement issued in Geneva.

The incidents have put pressure on the government, industrialists and the global brands that buy clothes from the factories to reform a sector that employs 3.5-4 million people and generates 80 percent of Bangladesh’s export earnings.

In July, Bangladesh approved a labour law to boost worker rights, including the freedom to form trade unions and a panel has also been formed to set a new wage by next month. But violent protests over pay led hundreds of factories to shut for almost a week in September.

In June, the United States cut some trade benefits for Bangladesh in response to poor working conditions. That move does not directly affect clothing exports, as garments were ineligible for benefits. But it could prompt similar action by the European Union that would have a far bigger impact. (Additional reporting by Shyamantha Asokan; Editing by Ron Popeski)

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