Bangladesh's monthly average sales from knitwear exports are expected to fall by at least 10 percent as shrinking demand and weak prices take a toll on the export-driven industry, a leading industry official told Reuters on Sunday.

Mohammad Fazlul Huque, president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the decline could be reflected in last month's data and last through the coming months. Bangladesh earned $3.8 billion by exporting knit textiles from July to January, the first seven months of 2008/09 fiscal year, out of total export earnings of $9.1 billion.

"Orders from our buyers in the recession-hit United States and European countries are shrinking while they have also asked us to hold back shipments for three to four months," Fazlul told Reuters.

"The prices of knit products also dropped by 10 percent over the last four months and buyers are still pressing us to cut prices further on agreed deals," he added.

"It looks impossible for us to survive in the global market unless the government offers any stimulus package," the industry chief said.

Textiles has been Bangladesh's biggest export and foreign exchange earner, fetching about $11 billion on average annually in recent years. Fazlul said the country's major textile competitors such as China, India, Pakistan, Vietnam, Philippines and Thailand, had provided a number of incentives to their exporters including offering loans at reduced interest rates and cutting tax on export earnings.

"Similarly we urge our government to provide 10 percent cash incentives on export and lower interest rates to 10 percent from 14 percent now," he said.

Fazlul said the industry was also making efforts to increase exports to under-penetrated markets such as Australia, Canada, Partugal, Spain, Japan and Russia.

Source: Reuters