Though the readymade garments sector in Bangladesh is currently under pressure for want of orders, its apparel exports registered a big jump in European markets in fiscal 2022-23 despite the economic slowdown driven by the Russia-Ukraine war.
Bangladesh exported apparel worth $23.52 billion to the European Union, registering a growth of 9.93 percent over the earnings of $21.40 billion FY22. According to statistics released by the Export Promotion Bureau (EPB) apparel exports to the UK reached $5 billion in FY23 jumping by 11.78 percent over exports of $4.5 billion in FY22.
Industry players attributed higher exports to an increase in exports of high-value-added apparel. The increase in the cost of input and freight charges also contributed to this increase. Still, the performance of Bangladeshi apparel is commendable given the challenges faced the world over.
Exporters’ said that non-traditional markets are also performing well following the Covid-19 pandemic shock but the overall apparel export volume remained low year-on-year in FY23. The EPB data reveals that Bangladesh’s apparel exports to non-traditional markets jumped by 31.38 percent to $8.37 billion in FY23, accounting for 17.82 percent of Bangladesh apparel shipments in FY23. Exports to the Canadian apparel market also grew by 16.55 percent to $1.54 billion in the last fiscal year.
Apparel shipments to its two major markets – the US and Germany declined by o 6.81% and 5.51% to $8.51 billion and $ 6.68 billion, respectively. Apparel exports to India and South Korea have recorded 41.58 percent and 22.45 percent growth to $1.01 billion and $538 million respectively, in FY23. The shipments to China registered a growth of 30.32 percent to about $290 million.
Exporters sought government policy support for further diversification of apparel goods, particularly non-cotton or man-made fiber items, as they are now dominating global markets. They also expressed concerns about a potential decline in Bangladesh’s apparel exports in the coming months, as most factories are operating below their full capacity due to low order volumes.
Most factories are currently operating at around 30 percent lower capacity. Moreover, despite increases in utility prices, the shortage of gas and electricity supplies has also resulted in higher apparel production costs.
Some buyers are also canceling orders or imposing up to a 25 percent discount, which is making the situation tougher for apparel exporters, he added. The apparel sector’s export income contributed 84.59 percent to the country’s total export earnings worth.
Bangladeshi apparel exports under pressure after posting growth in FY23
