Bangladesh garment sales soar despite deadly incidents

DHAKA Tue Jul 9, 2013 7:25am BST

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DHAKA (Reuters) - Bangladesh's exports rose 16.3 percent in June to $2.7 billion (1.8 billion pounds) on the year, boosted by stronger clothing sales, an export body said on Tuesday, as the low-cost country retains its allure for cost-crunching global retailers despite deadly incidents.

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 clothes going to Europe and 23 percent to the United States.

Garment exports totalled $21.5 billion for the financial year that ended in June 2013, up 13 percent from a year earlier, according to Bangladesh's Export Promotion Bureau. Total exports rose 11 percent to more than $27 billion in the fiscal year, but were nearly $1 billion short of the target.

The surge comes as the government considers measure to reform the industry after 1,132 people were killed in the April collapse of the Rana Plaza factory complex in the capital. A fire at another factory last year killed 112 people.

The incidents have put pressure on the government, industrialists and the global brands that use the factories to reform an industry that employs four million and generates 80 percent of Bangladesh's export earnings.

A revised labour law is in the works to ease the path for workers to form trade unions. They now need the permission of the factory owner to do so. A panel has also been formed to set a new wage within months.

Last week, the United States cut off long-time trade benefits for Bangladesh in a mostly symbolic response to the garment industry conditions that have cost more than 1,200 lives in the past year.

The U.S. move does not directly affect Bangladesh's clothing exports, since garments are not eligible for U.S. duty cuts. But it could prompt similar action by the European Union that would have a bigger impact, as Bangladesh's clothing and textiles exports to the EU are duty-free.

(Reporting by Ruma Paul; Editing by Clarence Fernandez)

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