Apparel exports to US drop over 13pc in January-May

The country's apparel exports to the United States, its largest destination, sustained a double-digit decline in the first five months of 2024, reaching $2.90 billion.
Data released by the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce showed a 12.31 per cent year-over-year decrease for Bangladesh compared to the same period in 2023.
The decline is evident in both the value and volume of exports.
Bangladesh shipped 6.22 per cent fewer garments, which is 956.55 million square metres, during January-May 2024 compared to 1.01 billion square metres in the corresponding period of the previous year.
US import figures show that the country's key competitors in ready-made garments China and Vietnam outperformed Bangladesh.
Exporters list a number of domestic issues like long lead times, inconsistent energy supplies and an overall high cost of doing business for their loss of export share in the US market.
These same factors, exporters say, give Vietnam an advantage in the US market.
US apparel imports from Vietnam totalled $5.41 billion in January-May 2024, a 1.48 per cent year-over-year decrease, according to OTEXA data released on July 3.
During the period, China's apparel exports to the US declined by 5.81 per cent to $5.43 billion.
OTEXA data shows that overall US apparel imports fell by 6.0 per cent to $29.62 billion in the first five months of 2024 -- down from $31.51 billion in the same period of 2023. Talking to The Financial Express, a number of exporters said that buyers are now expressing concern over the energy security of the country.
Reliable labour and energy supplies were previously two major strengths that fueled the local apparel growth.
Exporters said they are facing gas and electricity problems and factories cannot operate at full capacity.
Besides, they noted that increased Chinese investment in Vietnam has positioned the country to capitalise on China shifting focus, leading to rising Vietnamese exports to the U.S. 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 puts China and Vietnam, with their shorter lead times and more consistent energy supplies, in a stronger position.
He said the current gas crisis is making it difficult to meet existing lead times. 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, said the BKMEA leader.
"In many instances, we are forced to decline work orders because the offered prices fall below our production costs," Mr Hatem said, adding that they also face difficulties due to non-cooperation from banks.
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 many Chinese investments in Vietnamese manufacturing, he said.
OTEXA data shows that the US's RMG imports from Cambodia grew by 7.75 per cent to $1.28 billion in January-May 2024 compared to the same period in 2023.
Meanwhile, India's RMG exports to the US market declined by 2.06 per cent to $2.08 billion and Indonesia saw a 10.49 per cent drop to $1.64 billion during the same period.

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