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Bangladesh sees huge boost in garment export

Bangladesh, European, China, Europe, US

Economy

Bangladesh sees huge boost in garment export

Bangladesh is poised to emerge as the major exporter of apparel items to the European market, while according to Hamburg-based market research company Statista, Europe has this year imported readymade garments amounted to US$ 397.20 billion so far only during 2022. The figure is expected to grow annually by 6.94 per cent between 2022 and 2026.

The market’s largest segment is women’s clothing, US$215.80 billion of which was sold up until now in 2022.

By the end of 2022, 93 per cent of sales in the apparel market will be attributable to non-luxury goods, said the data.

According to Eurostat, in the January-June period of the current year, Bangladesh attained shipments worth US$11.31 billion, registering the highest year-on-year growth of 44.60 per cent, thus emerging as the second-largest exporter of apparel items.

European Union’s statistical office data said, China secured a 21.78 per cent rise, reaching US$12.22 billion. Currently, China is the world’s largest apparel exporter, with a 38 per cent market share.

Bangladesh is the second, with a 6.8 per cent market share. Local exporters expect it to reach 7 per cent at the end of this year.

Turkey is in the third position, which posted a 20.38 per cent year-on-year export growth to the European Union to reach US$10.89 billion.

Bangladesh garment exporters said, the amount of export would be significantly increased if there is adequate energy supplies to the mills and factories, while it is also essential to maintain the current law and order situation in the country.

Industry insiders said, the volume of export can reach three digits if the government can supply gas to the mills at adequate pressure. They said, orders are also coming to Bangladesh in big volumes from the US because of trade tensions with China.

Bangladesh has been bagging more work orders from the European retailers and brands because of China’s sympathy towards Russia.

In recent months, cotton import by China also declined significantly which also indicates that apparel work orders are shifting to other countries like Bangladesh.

Bangladesh could perform strongly as it already has the capacity to cater to international retailers and brands. Local manufacturers last year expanded their capacities by over 10 per cent just to cater to the influx of the work orders.

China’s escalating cost favors Bangladesh garment exporters

The word ‘sourcing’ invariably meant China, until the recent past. Of late, with issues such as Yuan appreciation, soaring labor and material costs plaguing the dragon nation, countries which were having their sourcing operation in China so far, are now considering other options. Market trends indicate spectacular views indicating that industry key players are slowly moving from China, and are considering other options for their sourcing requirements.

Earlier China was a most preferred sourcing destination. Evaluation criteria’s analyzed by any sourcing country for selecting a sourcing destination are; labor availability, skilled labor force, labor costs, infrastructure development, techniques, and skills available in the city. Many businesses have established their sourcing operations in different cities of China which had economic and social development.

But currently, industry players are feeling dismal about China. Numerable factors such as aging work force in China, increasing labor costs, Yuan appreciation, and hiking material costs are pushing China from its place as a desirable sourcing destination. Drastic development of the country has caused an increase in the price of material, labor and transportation. All this is likely to affect its competitiveness in the global market.

Increasing production costs shortens the gap of manufacturing costs between China and other countries. Buyers are seeking other alternatives that would be less expensive, comparatively over China. A survey report by KPMG reveals that, “With increasing labor costs and an aging workforce, China is losing its foothold as the world’s lowest cost manufacturer of consumer goods. Rising costs are forcing companies to take a closer look at new sourcing locations across Asia”. A survey about the German companies in China reveals that one out of every five German companies operating in China is planning to pull out their operations.

More Chinese made apparels exported to the EU and US were recalled during 2009, majority apparels being sportswear, children’s wear, and specialty garments. Out of 92 textile and apparel products recalled by the EU during 2009, Chinese made garments accounted for 65. This deteriorated the image of Chinese made apparels in the global market.

Tajul Islam is a Special Correspondent of Blitz.

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