Bangladesh's ready-made garment (RMG) exports to the European Union (EU) sustained a 2.47 per cent year-on-year negative growth during the first nine months of 2024.
Apparel exports to the EU between January and September fetched 13.43 billion euros compared to 13.77 billion euros during the corresponding period last year, according to Eurostat data.
RMG exporters said the EU's overall imports had fallen during the period under review due to the global economic slowdown, while Bangladesh lagged behind its competitors because of a number of factors, including energy shortages and high production costs.
The EU's total apparel imports from January to September stood at 62.86 billion euros, which was 2.48 per cent lower than 64.46 billion euros logged during the same period of 2023.
China fetched 17.31 billion euros during the first nine months of this year by exporting clothes to the EU against 17.70 billion euros in the corresponding period of 2023, marking a 2.23 per cent negative growth.
The EU's imports from Turkey and India recorded 7.13 per cent and 1 per cent fall to 7.08 billion euros and 3.38 billion euros, respectively, during the first nine months of 2024.
Vietnam also recorded a 0.33 per cent decrease, earning 2.83 billion euros during the said period, the Eurostat data shows. Pakistan, however, recorded an 8.21 per cent growth, bringing in 2.53 billion euros in this period.
When asked about the negative growth, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) former president Fazlul Hoque mentioned the global phenomena that had affected all major exporting countries, including Bangladesh.
He, however, said though the global demand had been improving in recent months, Bangladesh was failing to grab the opportunity fully as its competitive edges were eroding, mainly because of high utility prices, poor gas supply, and the latest wage hikes.
All these had raised production costs, fuelling the negative growth, added Fazlul, also the managing director of Plummy Fashions. He said work orders were coming to Bangladesh in recent months and low prices offered by buyers remained as one of the major challenges.
He further said the latest phase of labour unrest had also dealt a blow to the industry as buyers did not feel comfortable placing work orders in factories located in the industrial zones of Ashulia and Gazipur.
Talking to The Financial Express, SM Khaled, managing director of Snowtex Outerwear, said work orders for the October-December period were coming now.
He, however, opined that business was largely dependent on some global issues, including the duration of winter in Western countries and Donald Trump's new leadership in the US.
Echoing Fazlul, Square Denims Director Sayeed Ahmad Chowdhury said the impact of labour unrest might be witnessed in February next and onwards. He also commented the flow of work orders remained stable at present at his company.
A number of exporters told The Financial Express buyers do not shift or stop placing work orders with an announcement. Instead, orders are shifted gradually to avert business uncertainty.
They, however, opined that work orders had mainly been shifted to factories outside Ashulia and Gazipur to manufacture the goods within the lead time, while a certain quantity had already gone to other countries during the unrest.
In the meantime, RMG exports to the US, the single largest destination for Bangladesh, plummeted by 6.28 per cent during the January-September period of 2024, fetching $5.21 billion, according to data from the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce. The earnings were $5.77 billion during the corresponding period of 2023.
The drop is evident both in the value and volume of exports. Bangladesh shipped 1.49 per cent fewer garments to the US, totalling 1.73 billion square metres, in the January-September period of 2024 compared to 1.76 billion square metres in the corresponding period of the previous year.
© 2024 - All Rights with The Financial Express
