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Tuesday, May 28, 2024

American garment retailers reduce imports from all over the world including Bangladesh

The United States is Bangladesh’s garment’s single largest export destination. Its exports to the US have been regularly declining in recent months; though the decline is not Bangladesh specific because due to reduced orders from American retailers all other major exports around the world also suffered.

The data released by the the Office of Textiles and Apparel (OTEXA), a body under the American Commerce Department reveals that in the first quarter of current year garment shipments from Bangladesh to American markets declined by 17.68 percent to $1.75 billion.

Earlier in the first two months of this year (January-February) garment exports to the US declined by 19.24 percent to $1.18 billion, according to the data. The data further reveals that the collective shipment of textiles and garments slipped 17.37 percent to $1.81 billion in the January-March period of the current year.

Garment exports to the US have been declining over the past several months as American retailers and brands are importing less garments despite a gradual improvement in inflationary pressure to adjust with higher exports of garments in previous years. For instance, garment exports from Bangladesh to the US rose more than 53 percent after the Covid-19 pandemic as retailers and brands imported more to meet pent-up demand in 2022.

But garment exports did not increase at the same pace last year as American retailers and brands had plenty of old stock of unsold clothing items. The demand for apparel has however, been slowly reviving since then, with exports gradually approaching positive territory.
Another reason for decline in exports is that many garment factories in Bangladesh have faced long closures due to the wage hike movement, which stretched from September to December last year. Production at many factories was disrupted severely as workers agitated, demanding a wage hike. Another factor affecting exports was the gas and power crisis in Bangladesh prolonging the lead times. The lack of a deep-sea port in the country has also been affecting lead times.

Exporters say that the demand for the apparel among low-end consumers in the US did not fully recover, which particularly impacted Bangladesh it mainly exports low-end garment items to the US.

High interest rates in US banks also forced the consumers to adjust interest payments against loans, such as ones taken to purchase houses. However the good news is that the National Retail Federation (NRF), the largest retailers’ platform in the US, said retail sales grew at a steady pace in March. An official of the federation said that in the current highly competitive market, retailers are having to keep prices as low as possible to meet the demand of consumers looking to stretch their family budgets.

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