Garment exports up, but imports of inputs slump

Raw-material imports for Bangladesh's export-oriented readymade garment (RMG) industry dipped sharply in 2023, despite the sector maintaining a 3.67-percent year-on-year growth in exports, data showed.
Textile and apparel leaders attributed the import decline to a combination of factors: ongoing dollar crisis, sluggish global demand for RMG and local millers operating below capacity due to gas crunch.
According to millers, cotton imports fell significantly due mainly to the dollar crisis. They said gas constraints limited their production capacity to around 60 per cent.
Apparel sector leaders, however, noted a rise in the use of locally produced yarn and fabric, alongside increased imports of non-cotton or man-made fibres (MMF) and recycled yarn from garment and textile waste.
Data from the Bangladesh Textile Mills Association (BTMA) compiled from central bank figures shows a 24.85 per cent drop in cotton imports in 2023 to 1.35 million tonnes -- down from 1.80 million tonnes in 2022.
Similarly, another key RMG input yarn imports declined by 10.11 per cent to 0.92 million tonnes last year, compared to 1.03 million tonnes in 2022.
Woven and knit fabric imports also saw declines last year, falling by 14.49 per cent and 10.34 per cent respectively, to 0.49 million tonnes and 0.31 million tonnes in 2023.
The country imported 0.57 million tonnes and 0.35 million tonnes of woven and knit fabric respectively in 2022, according to BTMA data.
Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association (BTMA), pointed the finger at inconsistent gas supply, forcing mills to run at reduced capacity, for the cotton import fall.
He said many spinners, who primarily import cotton for the domestic market and do not have access to the export development fund, faced import difficulties amid the dollar crisis.
According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), RMG exports fetched the country $47.38 billion last year -- a 3.67 per cent increase from $45.70 billion in 2022.
Faruque Hassan, president of the BGMEA, credited an increased use of domestic yarn and fabric, leading to greater value addition, for 2023 export growth.
Garment exporters sourced more local materials and also utilised some previously imported stock, he told The Financial Express.
Moreover, imports of non-cotton or man-made fibre (MMF) significantly increased in 2023, as Bangladeshi manufacturers diversified their production towards value-added items beyond cotton, Mr Hassan said.
BTMA data shows a 13.39 per cent rise in polyester and viscose fibre imports in the January-November period compared to the corresponding period in 2022.
According to industry people, Bangladesh largely manufactures cotton-based products as 75 per cent of the readymade garments shipped for export are cotton-made.
However, Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), had a different opinion about the import fall. He translated the import fall of RMG inputs into declining export orders.
"Cotton is the core raw material for the RMG sector and the country is completely import-dependent," he said in his argument.
Mr Hatem, however, admitted some value additions which, he said, might have played a role in the reduced yarn and fabric imports.

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