Despite post-pandemic fall in consumer demand in the European and the US markets, the main destinations of Bangladesh's apparel products, the export performance of this flagship exportable item has remained more or less vigorous. This has been the case even in the face of adoption of tighter monetary policy on top of higher interest rate by the US Federal Reserve or Fed, which has had its ripple effect of depressing demand for consumer goods on either side of the Atlantic. No doubt, it also impacted the country's apparel exports negatively. Even so, in the immediate past fiscal (FY23), the nation's earning from the apparel or the Readymade Garment (RMG) export touched the milestone of about US$47 billion. Now, the RMG sector is all set for the strategic vision of reaching the export target of US$100 billion by 2030.
Nevertheless, there is hardly any room for complacency as the challenge before the country's basically RMG-dependent, export sector is daunting. Admittedly, the general policy thrust of widening the export basket and looking for newer export markets is an evolving option. It would take some time before Bangladesh can effectively wean itself from the current single-item, RMG-intensive export base. While continuing efforts in that direction, it would also be worthwhile to explore the still growing prospects of inter-apparel diversification. In this connection, it may be noted that the RMG products, which are mostly cotton-based, have of late, come up against stiff competition from apparels made of Manmade Fibres (MMF). Studies say that, currently, MMF products constitute around 50 per cent of world's total export of apparel items, while the share of those made of cotton is 42 per cent. Since extensive use of water as well as water contamination by pesticides used in cotton fields is a major environmental issue, production and supply of cotton fabrics have been facing uncertainties globally.
In consequence, the international markets are gradually tilting towards synthetic fabrics. Industry insiders think it is time Bangladesh increased its share of synthetic fabrics, or MMF, to take advantage of this current trend in the global apparels market. A recent research has further shown that side by side with RMG, by increasing the share of MMF-based apparel export, Bangladesh can earn to the tune of USD95 billion by 2030. In that case, the apparel sector will be required to grab 12 per cent of the world's MMF-based apparel market, while the share of the traditional cotton-based fabrics has to be 20 per cent. To go by the research findings, Bangladesh's synthetic fabrics subsector is yet to make its mark as it currently represents less than 5.0 per cent of the global market share, while the cotton fabrics still maintains a comfortable 16 per cent marker share. So far as the composition of Bangladesh's RMG export is concerned, synthetic fabrics export is only one third (at 24 per cent of total export) of the cotton-based RMG export (at 72 per cent of the total).
However, this is all about exhausting all the possibilities that the entire apparel sector including both synthetic and cotton fabrics has on offer. But for a robust export-driven economy, more needs to be done. In fact, there is no alternative to continued research and innovation to add additional value to existing products, upskilling the workforce to increase its productivity and adding new products to the export basket. If the export sector is given generous policy support, it will prove equal to the challenge.
Building a robust export sector
FE Team | Published: July 04, 2023 20:13:38
Building a robust export sector
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