Apparel exports of Bangladesh to America recorded a notable fall during the first five months of 2023, as global economic slowdown, inflation and US rate rises continued to dampen demand, latest statistics show.
Under the circumstances, induced by twin crises of pandemic and war, buyers' stores in the United States and Europe bloated, leading to fall in the exports, both in value and volume.
Bangladesh's readymade garment exports fetched $3.30 billion during the past January-May from the single-largest export destination, marking a 19.16-percent fall, according to the data released on July 06 by OTEXA, an affiliate of the US Department of Commerce.
The earnings were US$4.09 billion during the corresponding period of last year.
The OTEXA data also showed the same trend in shipment as it witnessed a negative growth of 30.91 per cent to 1.01 billion square metres during the period, down from 1.47 billion square metres in the corresponding period of 2022.
On the other hand, the overall US apparel imports in the last five months of the current calendar year declined by 22.92 per cent to $31.51 billion. Their apparel-import figure was $40.89 billion during the January-May period of 2022.
Under the overall economic downswing, Bangladesh, however, did a bit better than its competitors in garment export.
China and Vietnam - the key competitors of Bangladesh - counted contraction by 30.44 per cent and 28.07 per cent respectively during the period under review, OTEXA showed.
Apparel exporters and experts cited a sluggish demand amid economic slowdown, high inflation and high interest rates in the USA as factors behind this decline.
Industry-insiders say Bangladesh still is in a relatively better position compared to other competitors that suffered a decline in exports at a higher percentage.
Bangladesh also benefited from "the US buyers' shift from China, and China-plus policy", they said.
But the Russia-Ukraine war has affected the demand, resulting in the high inventory of buyers and reduced work orders in recent months.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) vice-president Md Shahidullah Azim says, " Geopolitical crisis, economic slowdown and huge inventory fuelled by high inflation and interest rates have eaten up the demand for apparel."
Bangladesh received 30-40-percent less work orders for the last several months due to the buyers' huge inventory mainly because of high inflation and interest rates there.
Responding to a question, he said Vietnam produce high value added items that receive high value, he adds.
Talking to the FE, Mahmud Hasan Khan, managing director of Rising Group, said overall US imports had fallen because of an economic slowdown, high inflation and high interest rates over there.
"As a result, the demand for RMG items declined," he said, adding that such a trend might continue until September next.
He, however, said buyers are placing orders which have to be shipped in October onwards ahead of their (US) festivals like Christmas and New Year celebrations.
He also feels that the huge inventory they had also started declining. Despite the sector having maintained a growth until February mainly because of production of value-added items and high raw material prices that pushed up the value of the products, exporters said, the exports in terms of quantity have fallen significantly.
Apparel exporters, however, think the global demand is falling mainly because of an adverse domino impact of the Russia-Ukraine war.
The Chinese share in the US market is decreasing due to a trade tension between the two countries, Chinese zero-Covid policy and the Uyghur issue, they said.
China's share in the US apparel market was 37.32 per cent in 2013, which fell to an estimated 21.75 per cent in 2022, according to the data.
On the other hand, Bangladesh's share rose to 9.75 per cent last year from only 6.20 per cent in 2013.
During the January-May period of 2023, the US imported apparel worth $5.76 billion from China, which was $8.28 billion during the corresponding period of 2022.
Vietnam exported apparel items worth $5.49 billion during the period under review, in a fall from $7.63 million in the corresponding period of 2022.
Meanwhile, US apparel imports from India during the period witnessed a negative growth of 20.80 per cent to $2.13 billion while Cambodia recorded 34.42-percent negative growth and earned $1.19 billion.
Munni_fe@yahoo.com
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