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Pandemic impact

BD RMG exports to US drop 18.54pc in Jan-July

MONIRA MUNNI | September 07, 2020 00:00:00


Bangladesh's apparel exports to its single largest destination - the US - declined by 18.54 per cent during the first seven months of 2020 calendar year, compared to the same period of last year, mostly due to the Covid-19 outbreak.

The country fetched US$ 2.90 billion from apparel exports to the US market from January to July of 2020 against $3.56 billion earnings of the corresponding period of 2019, according to data of the Office of Textiles and Apparel (OTEXA) - affiliated with the US Department of Commerce.

During January-July period of this calendar year, Bangladesh shipped 1.04 billion square metres of apparel items, which was 1.23 billion square metres in the same period of last year.

The US imported textile and apparel items worth $3.0 billion from Bangladesh from January to July of 2020, it showed.

After the Rana Plaza building collapse in 2013, Bangladesh's apparel exports to the US declined to $4.83 billion in 2014, which was $4.95 billion in 2013. In 2015, exports grew to $5.40 billion, but declined in next two consecutive years.

Apparel exports to the US started increasing again from 2018, and the country earned $5.93 billion from apparel exports to the US in 2019, according to the OTEXA data.

Bangladesh's apparel exports to the US in January grew by over 17 per cent, and continued growing although the rate was slow until April. Later, apparel exports entered the negative territory, when growth declined by over 12 per cent during January-May period.

On the other hand, Chinese apparel exports to the US continued to fall and witnessed a negative growth of 49.34 per cent to $7.34 billion in the first seven months of this year. China shipped apparel items worth $14.50 billion to the US during January-July period of 2019.

Meanwhile, the garment exports of Vietnam also declined by 11.06 per cent to $6.94 billion, and India witnessed 33.28 per cent fall to $1.75 billion during the same period of 2020.

The US overall apparel import declined by 30.68 per cent to $33.87 billion from January to July of 2020, which was $48.86 billion over the corresponding period of 2019, the OTEXA data showed.

Exporters said the US demand for apparel has declined mainly because of the coronavirus outbreak.

The Covid-19 pandemic also forced the local apparel makers to suspend their production for nearly one month in April. Although production resumed in May, they could not use their full capacity due to order cancellation/hold, shortage of work orders and health safety measures, they added.

When asked, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Dr Rubana Huq, said the US imports from Bangladesh increased (unusually) in January and February 2020 at the rate of 17.07 per cent and 4.79 per cent respectively. But the imports declined in March and continued till July.

On the other hand, as per the Export Promotion Bureau (EPB) data, RMG exports to the US market have been facing turbulence since the beginning of the fiscal year (FY) 2019-20.

As per the EPB data, exports grew by 0.46 per cent in the first quarter, while by 7.47 per cent, 7.25 per cent and 49.81 per cent negative in second, third and fourth quarter respectively.

Exports to the US in the first month of current fiscal year increased by 8.08 per cent, she added.

The OTEXA data indicates that since COVID hit China and Vietnam at the beginning of this year, supply chain of these countries were heavily disrupted, which might have caused such increase in imports from Bangladesh, she noted.

The retail sales of clothing in the US were also maintaining a steady trend, such as 2.0 per cent growth in January and 1.0 per cent in February, and the disaster started since March and it is still continuing.

The US imports declined by 50 per cent in March, by 87 per cent in April, by 63 per cent in May, and by 23 per cent in June.

The US imports from Bangladesh showed the similar trend in the same period, she said, adding that BD's export surged suddenly in Jan-Feb and then nosedived, mostly due to impact of the COVID-19 pandemic.

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