Apparel sourcing from Bangladesh

The countrywide turmoil and the overall depressing scenario prevailing for well over a fortnight are highly likely to leave an adverse impact on exports, especially that of apparel. This is particularly because the country's number one export product is largely reliant on overseas buyers' preference which, for valid reasons, may shift if they consider the atmosphere here uncongenial. For some time now, a growing discontent has been observed among major brands and retailers over issues such as, long lead time, energy and power shortage in exporting factories and a lack of compliance with labour rights. Exporters have been saying that buyers are placing more orders with Vietnam and China recently, due mainly to shorter delivery times. According to them, lead time for importing and processing for export has become longer-to 70-80 days from 50-55 days in the recent past.

Echoing the feeling a global study '2024 fashion industry benchmarking', jointly conducted by the United States Fashion Industry Association (USFIA) and the University of Delaware, says retailers in the United States are diversifying their sourcing base beyond China, Vietnam, and Bangladesh to mitigate the rising geopolitical risks, adding that while Asia remains the dominant apparel sourcing base, the leading buyers are planning to gradually shift to other potential sources. The study says seven of the top ten most-utilised apparel sourcing destinations among the respondents in 2024 are Asia-based, but the order of the top Asian suppliers has changed. The study report further states that shipping delays, supply-chain disruptions, and political instability related to sourcing have lately emerged as top concerns among US brands and retailers.

According to the study nearly 60 per cent of respondents plan to expand apparel sourcing from India over the next two years, exceeding the planned expansion from any other Asian country. On the other hand, about 48 per cent of respondents expressed interest in expanding apparel sourcing from Bangladesh over the next two years-- down from 52 per cent in 2023 and 58 per cent in 2022. Additionally, a higher percentage of respondents sourced from Cambodia (75 per cent utilisation rate), Indonesia (75 per cent utilisation rate), and Pakistan (61 per cent utilisation rate) this year, the report said. The report also states that Bangladesh has still remained the topmost competitive country in terms of product prices with a score of 4.0 among all apparel manufacturing countries. The average rating for Vietnam, the second most price-competitive country, has been found to be 3.5.

The study no doubt has rightly pointed out the key issues causing concern for the US brands and retailers in sourcing from Bangladesh. In fact, local exporters, too, were concerned about the problems vis-à-vis the relative advantage of sourcing from some competing countries. However, this must not dishearten them. The fact that Bangladesh, despite so many challenges since the dismantling of the MFA quota regime way back in 2005, has been struggling hard to successfully secure its position among the lead exporting nations explains the commitment and resilience of the exporting community. To ride out the prevailing odds, the government should be forthcoming in resolving some of the critical issues constraining production and exports.