RMG exports to EU witness 5.0pc negative growth in H1 2024

Bangladesh's ready-made garment (RMG) export to the European Union registered about a 5.0-percent year-on-year negative growth during the first half of this year.
It fetched 8.72 billion euro from RMG exports to the EU during January-June period of 2024 compared to 9.17 billion euro during the corresponding period of last year, according to Eurostat data.
RMG exporters said that overall imports by the EU fell during the period under review due to the global economic slowdown, while Bangladesh lagged behind its competitors due to energy shortage, long lead time and customs procedure.
The EU's total apparel imports in the first half of 2024 stood at 38.47 billion euro, which was 6.02 per cent lower than 40.94 billion euro earned during the same period of 2023.
China fetched 9.16 billion euro during the January-June period of 2024 against 9.87 billion euro, marking a 7.23 per cent negative growth.
EU's import from Turkey and India recorded 10.95 per cent and 4.53 per cent fall to 4.58 billion euro and 2.33 billion euro respectively during the first six months of 2024.
Vietnam also recorded a 6.15 per cent decrease to fetch 1.70 billion euro during the period, according to Eurostat data.
During the period, in terms of value, Bangladeshi knitwear items sustained the top clothing exporter to the EU making shipments worth 4.97 billion euro, followed by China that fetched 4.51 billion euro.
When asked, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) former president Fazlul Hoque attributed the global phenomena that have affected all major exporting countries, including Bangladesh.
However, Bangladesh is affected more than other competitors as its competitive edges are eroding mainly because of high utility prices, poor gas supply and latest wage hike.
All these have raised the production cost thus fuelling the negative growth, he added.
Arshad Jamal Dipu, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), attributed inflationary pressure and global demand fall for the decline in exports.
Echoing the exporters, Asif Ashraf, managing director of Urmi Fashions Ltd., said there were also two Eid holidays for 15-20 days that have slowed down the exports while he attributed the gas and electricity crisis to other internal factors.
Talking to the FE, BKMEA's executive president Mohammad Hatem said: "High lead time is one of the major reasons Bangladesh lags behind its competitors."
Due to the power and gas crisis, they could not utilise full production capacity, while facing difficulties in procuring raw materials timely, requiring 20-25 additional days to produce goods and make shipments.
Besides, they could not receive orders at the prices buyers were offering mainly because of high production costs, followed by price hikes in gas and electricity as well as accessories.
Bangladesh's RMG exports recorded negative growth also in the US and the UK market, he said, adding that these are the real scenario.
Commenting over the present situation, Mr Hoque, also managing director of Plummy Fashions Ltd., said buyers do not shift or stop work orders with an announcement but gradually shift orders to avert business uncertainty. And no buyers have left Bangladesh, he added.
One of his buyers was scheduled to place an order for next season at the end of July, he said, adding that he, however, didn't get that order. It means, he said, the buyer might have diverted the work order to other destinations.
Exporters, however, expressed different opinions as some of them believe that the orders for products Bangladesh produces won't be diverted to other places while another group claimed the country might witness a 15-20 per cent fall in projected work orders in this or the next season.
Some exporters said buyers are in a 'wait and watch' situation to observe Bangladesh's political situation.
Exporters and sector leaders, talking to the FE, however opined that exports will grow steadily as they expected the political situation to stabilise with the changes in the government.
Bangladesh also recorded more than 10 per cent negative export growth to the US, its single-largest export destination, and fetched US$3.40 billion during January-June period of 2024, according to US official data.
Meanwhile, the state-owned Export Promotion Bureau (EPB) halted publishing export data for the last two months from June 2024, last month of the last fiscal year, following the finding of the faux pas in export calculation.
Earlier on July 03, Bangladesh Bank data showed that actual exports during the period of July-April of fiscal year 2023-24 were $13.80 billion lower than the shipment value of goods published by the EPB.
And it also revealed US$9.54 billion less export value for the first 10 months of the fiscal 2022-23.
According to the EPB, exports fetched US$45.67 billion in the first 10 months of FY 2022-23 and US$47.47 billion in FY 2023-24 respectively.
The central bank reported US$33.67 billion and US$36.13 billion during July-April period of FY 2023-24 and FY 2022-23 respectively.

[email protected]