Bangladesh's woven exports nosedived by around 28 percent in January 2005 as compared to the same month in 2004, since the US, the major importer of Bangladesh made woven exports, gorged itself on Chinese made products, accounting for a 546 percent rise of Chinese exports during this month.

The major slump in woven exports dragged export growth down by around five percentage points in a single month. Export growth in the July-December period of the current financial year was 15.19 percent while it came down to 10.51 percent during the July-January period, according to Export Promotion Bureau (EPB) statistics.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) termed the situation worrisome, saying the government should sit with the BGMEA to solve the problems before buyers shift their orders to other countries.

"With the quota phase out, China shipped an amount to the US in January that we could not match in the last three years combined," Annisul Huq, president of BGMEA, told The Daily Star yesterday.

The government should immediately implement Saarc and Asean cummulation to put exports on track, he said. "We have to be alert without wasting any time. The government should work to get duty-free access to the US market and solve existing bottlenecks at home immediately."

Chinese exports surged in categories like brassieres, cotton knit shirts, men's woven shirts, cotton trousers, dressing gowns, underwear, man-made fiber knit shirts and man-made fiber trousers, Huq said, adding that all of those except brassieres are major items for Bangladesh .

Prices dipped 25 percent in January alone, he added, saying that Bangladesh could significantly benefit from safeguard measure taken by the US.

"As woven exports, which are our major product to the US, slumped in January, it is seen that the quota-phase out is affecting our exports," said Professor Mustafizur Rahman, research director of the Centre for Policy Dialogue.

The present situation justifies Bangladesh's demand for duty-free access to the US, he said, adding that Bangladeshi products are now subject, on average, to a 15 percent duty in the US market.

"Getting duty free access for our products there will help us to be competitive," Mustafiz said.

Bangladesh's exports to the US market have been in a declining trend in the last few years because of stiff competition from Chinese products and that is continuing, he said. "It is difficult to say how much the quota phase out will affect our exports on the basis of one-month statistics," he added.

According to EPB statistics, exports fetched US$730 million in January 2004 while in January 2005 that amount dropped to US$642.59 million, recording 11.94 percent of negative growth.

"Our export growth was 21.84 percent in the first quarter of the current fiscal year. The growth is coming down alarmingly and in January growth was negative, which made us concerned with the present situation," said a highly placed source at the commerce ministry.