Bangladesh's apparel exports to the United States during the first nine months of 2024 sustained a negative growth compared to the major competitors that are improving fast including China, Vietnam and India.
The country's readymade garment exports to the US-its single largest destination-plummeted 6.28 per cent during the January-September period of 2024, reaching US$5.21 billion, according to the Office of Textiles and Apparel (OTEXA) under the US department of commerce data released Thursday.
Bangladesh earned $5.77 billion during the corresponding period of 2023.
The drop is evident in both value and volume of exports.
Bangladesh shipped 1.49 per cent fewer garments, totalling 1.73 billion square metres, during January-September 2024 compared to 1.76 billion square metres in the corresponding period of the previous year.
The country's position remained unchanged as the third-largest apparel exporter to the US market with 9.07 per cent share while China and Vietnam occupied the first and the second highest positions with 21.06 per cent and 18.75 per cent stakes respectively.
Vietnam, India, Cambodia and Pakistan entered into the positive territory during the period while China recorded 2.28 per cent negative growth during the period.
Exporters attribute the loss of export share and failure of the China shift fully in the US market to several domestic issues, including extended lead time, inconsistent energy supplies and a generally high cost of doing business.
Meanwhile, a study by the US Fashion Industry Association (USFIA) found that the American fashion companies are diversifying their apparel sourcing and exploring opportunities in emerging destinations, especially India, amid growing risks and market uncertainty in Bangladesh.
It mentioned shipping delays, supply-chain disruptions, and 'managing geopolitics and other political instability' related to sourcing as the top five concerns among the US brands and retailers in 2024.
According to the study, buyers consider India to be more competitive than most other Asian suppliers regarding vertical integration capability, manufacturing flexibility and agility.
India's fashion exports to the US showed improved performance over the months.
India's RMG exports to the US market slightly increased by 0.47 per cent to $3.63 billion, while Cambodia and Pakistan saw 7.09 per cent and 2.32 per cent rise to $2.78 billion and $1.58 billion during the January-September period of this year.
US apparel imports from Vietnam totalled $11.21 billion in January-September 2024, marking a 1.22-percent year-over-year growth, according to OTEXA data.
During the same period, China's apparel exports to the US declined by 2.28 per cent to $12.50 billion.
OTEXA data shows that overall US apparel imports fell by 2.57 per cent to $59.32 billion in the first nine months of 2024, down from $60.89 billion in the same period of 2023.
Overall US apparel imports, in terms of volume, increased by 2.57 per cent followed by a 4.06-percent rise from China, 6.66 per cent from Vietnam, 9.58 per cent from India, 11.43 per cent from Cambodia and 1.63 per cent from Pakistan.
Talking to The Financial Express, exporters said they were facing gas and electricity issues with factories unable to operate at full capacity. Besides, unrest in the last several days has taken a heavy toll on the sector.
They also pointed out that an increased Chinese investment in Vietnam has positioned the country to capitalise on China's shifting focus, leading to rising Vietnamese exports to the US market while orders are also shifting to India in recent times.
Fazlul Hoque, former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said all countries were affected by the sluggish global demand including the EU and US which now is getting better.
The work-order situation has been improving in recent months with a rising trend despite price challenges, he said, explaining that local yarn prices are also going high.
Echoing Mr Hoque, Mahmud Hasan Khan, managing director of Rising Group, said the work-order projection for next January-February period is 'not bad'.
Regarding prices, he said it is difficult to get the expected rates that mainly depend on the bargaining capacity. Many accept the lower price than their overhead cost mainly for the sake of running the units.
Exporters said Bangladesh is lagging behind due to many of its internal issues and buyers are now placing orders with shorter lead times due to various factors.
This situation puts China and Vietnam, with their shorter lead time and more consistent energy supplies, in a stronger position, they noted, adding that the gas crisis is making it difficult for them to meet existing lead time.
They also mentioned that garment manufacturing is a business of lead time - the sooner the exporters can ship goods, the higher they will get work orders. Meeting production timelines is difficult as securing raw materials takes a longer time while they need additional days in opening back-to-back LCs because of the problems in banks, they added.
Talking to the FE, a number of exporters expressed fear of shifting work orders as they could not run factories due to labour unrest.
According to industry sources, a total of 37 readymade garment factories in various industrial belts - 32 located in Gazipur and Mymensingh areas and five in Savar, Ashulia and Zirani areas - could not operate on Thursday due to workers' unrest.
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