Bangladesh's apparel exports to the United States have sustained double-digit negative growth, while the performance of its major Asian competitors is improving fast.
The country's garment shipments to its single-largest US market plummeted 10.27 per cent during the January-July 2024 reaching $4.09 billion year on year.
Data available with the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce shows Bangladesh earned $4.56 billion in the corresponding period of 2023.
This decline is evident in both the value and volume of exports.
Bangladesh shipped 4.55-per cent fewer garments, totalling 1.33-billion square metres, in January-July 2024 compared to 1.39-billion square metres in the corresponding period of the previous year.
US import figures show Bangladesh's key competitors China and Vietnam outperformed it as they shipped a higher volume of apparel. Their negative growth rates were also improving.
Exporters attribute this loss of export share in the US market to domestic issues like extended lead time, inconsistent energy supply and a high cost of doing business.
A US Fashion Industry Association study shows American fashion companies are diversifying their apparel sourcing and exploring opportunities in destinations like India amid growing risks and market uncertainty in Bangladesh.
It cites shipping delays, supply-chain disruptions, and 'managing geopolitics and other political instability' related to sourcing as top five concerns among US brands and retailers in 2024.
They consider India to be more competitive than most other Asian peers regarding vertical integration capability, manufacturing flexibility and agility.
Despite still being in the negative trend, India's fashion exports to the US showed improved performance over months.
India's RMG exports fell by 2.21 per cent to $2.84 billion, while Indonesia saw a 7.86-per cent drop to $2.28 billion during the January-July period of 2024.
US apparel imports from Vietnam totalled $8.08 billion during the period in question, marking a 1.57-per cent YoY decrease, according to OTEXA data released on August 04.
Chinese exports fell by 4.22 per cent to $8.75 billion during the same period.
OTEXA shows overall US apparel imports fell by 4.65 per cent to $43.63 billion in the first seven months of 2024, down from $45.76 billion in the same period of 2023.
However, US imports, in terms of volume, increased by 1.42 per cent followed by a 2.97-per cent rise from China, 5.87 per cent from Vietnam, 6.78 per cent from India, 13.27 per cent from Cambodia and 2.97 per cent from Pakistan.
Talking to the FE, several exporters highlighted buyers' concern over the ongoing situation that might put another negative impact.
Exporters are facing gas and electricity issues, with factories unable to operate at full capacity. Also, factory unrest has taken a heavy toll on the sector.
Increased Chinese investment in Vietnam has led to rising Vietnamese exports to the US market, while orders have also been shifted to India in recent times.
According to Bangladesh Knitwear Manufacturers and Exporters Association president Mohammad Hatem, all countries have been affected as global demand is slow and so for Bangladesh.
"Bangladesh is also lagging behind for many internal issues. Buyers are now placing orders with shorter lead time due to various factors," he told the FE.
This situation puts China and Vietnam, with their shorter lead time and more consistent energy supply, in a stronger position, according to Mr Hatem.
The current gas crisis is making it difficult to meet existing lead time, he said.
"Meeting production timelines is difficult as securing raw materials takes longer time while they need additional 14-15 days in opening back-to-back LCs because of problems in banks."
To compound problems, Bangladesh does not have a deep-sea port, causing delays in both import and export activities. They also face customs difficulties in import-export activities.
"We have to reschedule lead time with buyers," said Mr Hatem.
A good portion of winter orders they have already lost. If such a situation prevails for a longer period, orders for next summer season may also shift.
Talking to the FE, a number of exporters expressed fear of shifting work orders as they could not run factories due to agitation by workers and outsiders.
According to BGMEA, 129 RMG units in different industrial belts - 64 in Jirabo-Bishmail area and 65 in Jirabo-Baipail area - could not operate on Thursday due to unrest, although they started smoothly in the morning except a few.
Most of the factories announced leave after 3:00 pm, BGMEA sources said.
Some 167 ready-made garment factories on Wednesday and 126 on Tuesday suspended operations, while 100 were closed on Monday amid this agitation.
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