Bangladesh's apparel export dipped 36.02 per cent to US$8.83 billion in the last quarter of the past fiscal year, compared to the turnover of previous three months.
Latest data from Bangladesh Bank (BB) sowed the significant decline in the April-June quarter of FY2023-24. In the previous January-March quarter the earnings came to $11.77 billion.
This figure is also 1.38-percent lower than that of the same quarter of the previous fiscal year, April-June FY2022-23, when earnings reached $8.96 billion, as reported by the central bank.
The United States, Germany, the United Kingdom, Spain, France, the Netherlands, Italy, Canada and Belgium were the top destinations for Bangladesh's RMG exports during April-June of FY24.
From these nine countries, Bangladesh earned over $ 6.35 billion in the apparel export, accounting for 71.97 per cent of total exports from the main export industry of Bangladesh.
In the quarter under review, net RMG export (determined by subtracting raw- material-import value from the export invoice) was $5.04 billion or 57.04 per cent of gross RMG exports.
Since the emergence of readymade garment (RMG) industry in the country, it has burgeoned into an economic powerhouse, propelling the country onto the global stage as a manufacturing hub for apparel.
This sector has blossomed into a juggernaut, accounting for the lion's share of the country's export earnings, creating employment opportunities, and also strengthening women empowerment.
The stakeholders have opined that despite the remarkable growth and success, the RMG industry in Bangladesh faces several challenges, like concerns related to labour rights, workplace safety, and environmental sustainability.
Other drawbacks are limited product-and market diversity, lack of sufficient backward-linkage industry, concentrated market, high lead time and lack of efficiency in producing high-value products, global geopolitical conflicts, energy-price hike etc which have changed the overall trade dynamics in this sector, they added.
Amid global slowdown stemming from the Russia-Ukraine conflict along with other geopolitical conflicts, overall performance of RMG-export earnings was still in better position, compared to the previous year, aided by notable depreciation of the taka, the BB report says.
However, RMG-export performance was subdued in April-June of FY24 compared to previous year, reflecting weak global demand for clothing. Among the garment sub-sectors, woven garments accounted for 37.76 per cent of total export earnings, while knitwear contributed 43.84 per cent.
Product-wise shares of export earnings during April-June of FY24 show that among the non-RMG items, leather and leather products accounted for 2.26 percent, agricultural products for 2.19 percent, chemical products for 0.86 percent, jute goods for 2.01 percent, and other products for 10.63 per cent.
Nevertheless, the RMG sector made a significant contribution of 7.87 per cent to Bangladesh's GDP or gross domestic product in FY24. The total RMG export earnings for FY24 stood at US$ 36.13 billion, which indicates a growth of 5.36 per cent as compared to the previous fiscal year.
Shams Mahmud, managing director of Shasha Denims Ltd and former president of Dhaka Chamber of Commerce and Industry (DCCI), attributes the decline in apparel-sector exports primarily to "poor energy security".
"Due to unreliable energy supplies, apparel exporters have been forced to operate at reduced capacity, resulting in fewer orders," Mr Mahmud explains.
He urges the government to ensure an uninterrupted gas supply to support the sector's growth. The leading businessman also notes that the Eid holiday during the period likely impacted export volumes.
Despite recent unrest, he emphasises, stability has now been restored, and the outlook for the sector is positive.
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