Regaining denim primacy

Denim, acclaimed as a highly prospective growth driver of the country's garment industry, has begun to shed its shine in the export market. A piece of bad news no doubt — a sudden decline in the primacy of Bangladeshi denim in the global market is attributable to not only better performance of the competitors but to a host of other factors also. In fact, the EU-GSP was largely instrumental in making the headway for Bangladeshi manufacturers and exporters of denim products backed by orderly and efficient supply chain management. However, global inflation followed by consumer austerity in recent times coupled with the rise in cost of production is believed to have caused the export slump.
A FE report quoting industry sources says that Bangladesh is losing its competitive edge to Turkey, Mexico and Pakistan mainly because of the high cost of production triggered among other factors by costly dollar. The country dominated the global denim market with its sustained position as top supplier to two major export destinations — the United States and the European Union — on a high annual growth in 2022. Bangladesh had earned US$943.70 million and US$1.55 billion from US and EU market respectively in 2022, becoming the top denim supplier. The country earned US$561.29 million and US$798.42 million from the US market while US$1.02 billion and US$1.18 billion from the EU respectively in 2020 and 2021. However, during the first half of 2023, denim exports to the USA and the European Union saw 33 per cent and 22.48 per cent negative growth respectively. Denim exports fetched Bangladesh US$298.75 million from the USA in January-June period of this calendar year — down from 445.52 million in the corresponding period of the last year. Demand for denim garments in the US declined 29.34 per cent - from $ 2.05 billion in the first half of 2022 to $ 1.44 billion in the corresponding period of 2023. There is also a marked fall in EU's denim imports from the world by 17.19 per cent during the period.
While inflationary pressure accounts for the overall slump in global apparel market, in case of Bangladesh, according to the industry people, it is the high cost of production prompted by gas price hike and gap in foreign currency price in the kerb market and official rate that is adversely affecting export of denim garments.
There is more to these. It has been learnt that Bangladeshi suppliers are finding it difficult to cope with the changing pattern of denim export orders. The long-run orders for a single-style design are now being replaced with multi-style designs. According to an exporter quoted in the aforementioned FE report, in order to cope with the changing trend of export orders, the production line has to be changed into what is known as 'modular system' with skilled workers capable of performing multiple tasks. This clearly necessitates suitable transformation for sustainable production processes. Concerned quarters will hopefully put in their best to do the needful for regaining the denim market.