RMG, Knits, Cotton, Apparel, Lingerie and Fashion Industries of Bangladesh

[Joel Ahmed]

https://www.tbsnews.net/economy/apparel-exports-us-fall-13-jan-mar-627322

Jasim Uddin

06 May, 2023, 11:15 pm

Last modified: 06 May, 2023, 11:17 pm

Apparel exports to US fall 13% in Jan-Mar

The overall apparel demand in the US is seeing a downturn due to an economic slowdown induced by the ongoing Russia-Ukraine war

Bangladesh's apparel exports to the US shrank by 13.34% in the first quarter (January to March) of 2023 as this key market is going through an overall slowdown in demand for garment products.

Bangladesh's apparel shipment to the US was valued at $2.14 billion in the first three months of this year, which was $2.46 billion in the same period last year, according to the US Department of Commerce's Office of Textiles and Apparel (OTEXA).

The overall apparel demand in the US is seeing a downturn due to an economic slowdown induced by the ongoing Russia-Ukraine war, exporters said. 

However, they said the US market retains a good position for Bangladeshi apparel compared to other export destinations and expected better figures by the end of the year. 

The OTEXA data show that the overall US apparel import declined from $24.25 billion to $19.47 billion in Q1 of 2023 – a 19.73% decline.

During the same period, the world's top apparel exporter China saw its garment shipments to the US drop by 34.89% to $3.47 billion.
Vietnam, the second largest apparel exporter to the market, also saw its apparel exports dip by 24.25% to $3.37 billion. 

Besides, Indian Indonesian apparel shipments to the US dropped by 11% and 17.96% respectively in the first three months of 2023. 

BGMEA President Faruque Hassan told The Business Standard that the negative growth underlines a global economy that is in turmoil as most western countries are facing high inflation and high-interest rates due to the ongoing war between Russia and Ukraine.

"As we feared, the global apparel demand slowdown would impact firstly on our orders volume and then value,"  Faruque Hassan said.

The BGMEA president said that Bangladesh had maintained moderate growth despite falling demand for apparel at international markets, thanks to the shipment of high-value items. "But apparel values are now falling in the same row." 

He mentioned that this year would remain challenging for the apparel industry.

Bangladesh may miss its export target for this fiscal year, Faruque Hassan said, however, hoping that despite all challenges Bangladesh would be able to maintain a better position than other competing countries by the end of the year. 

[Joel Ahmed]

https://www.thedailystar.net/business/economy/news/bangladesh-retains-second-position-rmg-export-eu-3310546

Bangladesh retains second position in RMG export to EU

Refayet Ullah Mirdha

Thu May 4, 2023 09:00 AM Last update on: Thu May 4, 2023 11:41 AM

Bangladesh retained second position in apparel shipments to the European Union (EU) in the first two months of the current year with a 22.75 per cent share of the trade bloc's overall garment imports, according to data from EUROSTAT.

China remained the top supplier at the time, providing 26.27 per cent of the EU's total apparel imports.

However, the EU's overall apparel imports for January and February declined by $322 million, or 2.03 per cent, compared to the corresponding period of 2022.

In terms of quantity, the EU's clothing imports fell sharply by 10.09 per cent year-on-year, or 70 million kilogrammes (kgs), in the January-February period.

Apparel imports from China fell 13.11 per cent year-on-year to $4.08 billion at the time with shipments from the top sourcing destination having shrivelled by 16.42 per cent, or 32 million kgs.

In contrast, the EU's apparel imports from Bangladesh increased by 5.47 per cent year-on-year, or $183 million, during the January-February period.

However, the quantity of shipments declined by 3.02 per cent, or 6 million kgs, at the same time.

Among the top 10 apparel sourcing countries for the EU, Bangladesh, India, Vietnam and Pakistan showed positive growth while Turkey and some other nations saw decline.

The EU's imports from Turkey, its third largest apparel source, fell by 11 per cent year-on-year during the January-February period, when the country shipped $1.82 billion worth of clothing items.

The global economy and trade scenario are showing signs of depression, which is clearly affecting the European market as evinced by the data, according to Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Although Bangladesh has been performing relatively better than its major competitors, the growth seen in the first two months of 2023 was largely due to inflated raw material prices and subsequent hikes in the production cost.

So, the value of goods exported went up while the overall volume fell, Hassan said in an email to BGMEA members.

"However, we need to cautiously monitor the trend in major markets, focus on alternative strategies, such as reducing dependence on single markets or products, and ensure balanced investment plans for backward and forward linkages," he added.

Hassan went on to say that the sale of garment items has slowed a bit in western markets due to high inflation stemming from the ongoing Russia-Ukraine war that began on February 24 last year.

It is due to the war that most global apparel retailers and brands are witnessing a significant build-up of inventory at their stores.

"So, they have lowered their work orders for new clothing," he said.

Local exporters had been covering the lower demand for garment items by supplying high-end, value-added clothing to secure better prices for the past few months.

However, this is not possible anymore as the demand for such apparel is falling steeply because of the high bank interest rates and inflation resulting from the war, Hassan added.

The unit price of garment items made in Bangladesh increased by 8.75 per cent year-on-year in the January-February period, EUROSTAT data shows.

As such, clothing from the country sold for $18.26 per kg in the EU during the first two months of the year, up from $16.79 per kg in 2022.

The average price of imported garment items in the EU increased by 8.97 per cent to $24.88 per kg in January-February compared to $22.83 per kg in the corresponding period the year before.

China saw the lowest price hike for its clothes in the EU with a 3.97 percent increase while Indonesia witnessed the highest with 22.97 per cent.

Meanwhile, the price of apparel from Turkey saw growth of 13.95 per cent while Vietnam registered 13.01 percent, Cambodia 12.05 per cent, India 9.16 per cent and Morocco 7.78 per cent.

[Joel Ahmed]

https://www.thedailystar.net/business/economy/news/sudden-surge-orders-test-rmg-textile-sectors-capacity-3418311

Refayet Ullah Mirdha

Thu Sep 14, 2023 06:00 AM
Last update on: Thu Sep 14, 2023 11:14 AM

A sudden surge in orders to test RMG, textile sectors’ capacity

Bangladesh might be the second-largest apparel supplier in the world, but its current installed capacity will not be adequate to meet demand if orders surge significantly as buyers shift away from countries such as China and Vietnam.

On the back of the existing capacity, the country exported garment items worth $46.99 billion in the last fiscal year, registering a 10.27 percent year-on-year growth, according to data from the Export Promotion Bureau.

China sold apparel items worth $182 billion globally and Vietnam shipped products amounting to $35 billion in 2022, data from the World Trade Organisation showed.

Bangladesh's share in the global readymade garment trade more than tripled in the past 17 years: in 2005, the country's share was 2.5 percent but it rocketed to 7.9 percent last year.

And local suppliers say Bangladesh's share would grow in the coming years, a prospect that might bode well for the country's largest foreign exchange earning sector but it could also bring about one of the stiffest challenges for the sector as well.

For example, if 10 percent orders are diverted from China to Bangladesh, this will bring businesses worth $18.2 billion for the latter. Such a volume of orders is enough to put the manufacturing capacity under strain and bring about a raw material shortage for local suppliers like they witnessed in 2021-22 after the global supply chain rebounded from the severe fallout of Covid-19.

Bangladesh's garment shipment surged more than 35 percent in FY22.

Already, some garment-supplying countries such as Myanmar, Ethiopia, Cambodia, China, India, Pakistan and Cambodia have seen their global market share in the garment segment slash over the last few years whereas Bangladesh's pie is expanding.

For instance, China's share in the global apparel business fell from 36.6 percent in 2010 to 31.7 percent in 2022, owing largely to its dragging tariff war with the US.

The severe impact of the pandemic, the Russia-Ukraine war, the higher cost of production and the dearth of skilled workers have also contributed to the fall in the share for the world's largest apparel supplier.

Mohammad Abdullah Zaber, managing director of Noman Group, said a lot of US-based orders for fabrics have come to his factory from China and India over the last one year.

So, he has already expanded the capacity.

"There is a forecast that orders may see a strong rebound next year as international retailers and brands are running out of their stocks of unsold apparel items," said Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA).

He said Bangladesh has the capacity to supply goods against a large volume of orders, but many mills are running below capacity owing to an inadequate supply of gas and power and the dollar crisis in the banking sector.

Many of the mills that were used to produce 80 tonnes of yarn a day are producing 40 tonnes to 50 tonnes of raw materials currently, he said, adding that dyeing mills are also facing a similar situation.

"Under the circumstances, new investment is very low."

Asking not to be named, the country manager of a retailer from the Netherlands said although more orders are flowing to Bangladesh, the volume is still slow.

He said orders are expected to see a jump if the political chaos linked to the national election does not linger.

Monsoor Ahmed, chief executive officer of the BTMA, the platform of primary textile millers, said the knitwear sector has the capacity to meet demand, but the woven sector is lagging behind as their capacity is low.

Presently, more than 500 spinning mills supply raw materials to knitwear manufacturers. Of them, only 200 are export-oriented.

The installed spinning capacity is 4,500 million kilogrammes, but they are manufacturing 2,400 million kgs of yarn currently as their full capacity can't be utilised because of the gas and power shortage, he said.

"Spinners can't go for expansion because of the dollar shortage," he said, adding that only 60 weaving mills produce fabrics for the export-oriented garment sector.

In denim, Bangladesh is, however, capable of catering to any volume of orders. Local denim millers produce more than 700 million yards of fabrics per year.

According to Ahmed, setting up a new factory is time-consuming and it takes at least three years and costs Tk 700 crore to set up a medium-sized factory.

Since international buyers have cut the lead time to 45 days to 60 days from 90 days and 120 days, local garment suppliers have already come under pressure. In order to deliver products within agreed deadlines, they are using more locally produced yarn and fabrics.

Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, also said that the country may find it challenging to supply goods if orders climb suddenly.

The lingering gas crisis, a shortage of adequate skilled workers, and higher prices of yarn are major bottlenecks that may prevent Bangladesh from attracting buyers looking to move away from other countries, he said.

He thinks orders will pick up after December as the global supply chain is recovering and international buyers are coming up with an additional volume of work orders.

Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development, a think-tank, said the capacity of the country needs to be strengthened as exports are bouncing back in line with the revival of the global supply chain.

"A lot of work orders may come to Bangladesh thanks to the China-Plus One policy adopted by many countries to reduce their dependence on a single source, namely China."