The country's apparel exports to the United States -- its largest single market -- plummeted more than 10 per cent in the first half of 2024, reaching $3.40 billion.
Data from the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce showed a 10.97 per cent year-over-year decline for Bangladesh compared to the same period in 2023.
The drop is evident in both the value and volume of exports.
Bangladesh shipped 5.0 per cent fewer garments, totalling 1.11 billion square metres, during January-June 2024 compared to 1.17 billion square metres in the corresponding period of the previous year.
US import figures show that Bangladesh's key ready-made garment competitors, China and Vietnam, outperformed the country.
Exporters attribute the loss of export share in the US market to several domestic issues, including extended lead times, inconsistent energy supplies and a generally high cost of doing business.
They argue that these same factors give Vietnam a competitive advantage in the US market.
Meanwhile, a study by the US Fashion Industry Association (USFIA) found that American fashion companies are diversifying their apparel sourcing and exploring opportunities in emerging destinations, especially India, amid growing risks and market uncertainty in Bangladesh.
This year, more respondents reported sourcing from India (89 per cent utilisation rate) than from Bangladesh (86 per cent utilisation rate) for the first time since the survey began in 2014.
Besides, nearly 60 per cent of respondents plan to expand apparel sourcing from India over the next two years, surpassing planned expansion from any other Asian country.
In contrast, 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.
The study cites shipping delays, supply-chain disruptions, and 'managing geopolitics and other political instability' related to sourcing as the top five concerns among US brands and retailers in 2024.
They consider India to be more competitive than most other Asian suppliers regarding vertical integration capability, manufacturing flexibility and agility.
Despite still being in the red, India's fashion exports to the US showed improved performance over the months.
India's RMG exports to the US market declined by 2.64 per cent to $2.44 billion, while Indonesia saw a 9.75 per cent drop to $1.91 billion during the January-June period of the current year.
US apparel imports from Vietnam totalled $6.58 billion in January-June 2024, marking a 2.31 per cent year-over-year decrease, according to OTEXA data released on August 6.
During the same period, China's apparel exports to the US declined by 6.37 per cent to $6.81 billion.
OTEXA data shows that overall US apparel imports fell by 6.04 per cent to $35.74 billion in the first six months of 2024, down from $38.04 billion in the same period of 2023.
While talking to The Financial Express, several exporters said buyers are now expressing concern over the country's energy security, as reliable labour and energy supplies were previously major strengths that fueled local apparel growth.
Exporters said they are facing gas and electricity issues, with factories unable to operate at full capacity. Besides, unrest in the last two weeks has taken a heavy toll on the sector.
They also said that increased Chinese investment in Vietnam has positioned the country to capitalise on China's shifting focus, leading to rising Vietnamese exports to the US market.
Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said buyers are now placing orders with shorter lead times due to various factors. This situation puts China and Vietnam, with their shorter lead times and more consistent energy supplies, in a stronger position.
The current gas crisis is making it difficult to meet existing lead times, he said, adding that meeting production timelines is difficult as securing fabric can take 15-20 days due to gas and electricity shortages.
Further compounding the problems, Bangladesh does not have a deep-sea port, causing delays in both import and export activities. On top of this, rising gas prices and recent wage hikes are eroding production cost competitiveness, Mr Hatem added.
"In many instances, we are forced to decline work orders because the offered prices fall below our production costs," Mr Hatem said, adding that non-cooperation from banks also causes difficulties for the exporters.
Bangladesh is also falling behind Vietnam in capturing redirected orders from China. Vietnam benefits from several advantages, including shorter lead times, lower tariffs for the US market, strong connectivity with China and numerous Chinese investments in Vietnamese manufacturing, he said.
He said the recent unrest amid anti-quota movements has also set back the industry.
"With the proposed interim government led by Nobel laureate Dr Muhammad Yunus, we expect a new era to usher in and business with the US will increase in the coming days," he believes.
OTEXA data shows that US RMG imports from Cambodia grew by 4.45 per cent to $1.52 billion in January-June 2024 compared to the same period in 2023.
munni_fe@yahoo.com