Page 10 - TEXtalks. January-February 2023

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China is being replaced by

Bangladesh as the EU top ITMF global textile

garment supplier industry survey

Bangladesh may well become the leading apparel supplier to the European Union in the next few years on the
strength of continuous investment in updated knitting machines and textile manufacturing technology as
Chinese exports continue to plunge.
Bangladesh media hopes the Bangladesh textile exports will fill the void being created by China which currently
is the largest apparel exporter to the EU. According to the EU statistical office, Bangladesh currently com-
mands 29.4 percent of total EU apparel imports.
During Jan-Nov 2023 EU's imports from China reached US$25.49 billion a growth of 22.43 percent
year-on-year growth, Bangladesh reduced the gap with a growth grew by 41.76 percent in the same period to
$19.40 billion. According to media reports, China has been losing its global apparel market in the last few
years due to multiple factors. These include a shortage of skilled workforce, an increase in production costs.
The withdrawal of foreign investments from China coupled with its Covid-19 policy. Bangladesh is not the only
country to replace China created void, other countries like Vietnam, Thailand, Cambodia, India, and Pakistan Business situation: gloom – Expectations: boom
are in the race.
China's market share declined to 32.2 in the global apparel trade stood at 39.3 percent in 2015 and dipped to The business situation is at a new low point since ITMF started the Global Textile Industry Survey in 2021.
32.2 percent. Bangladesh on the other hand succeeded in increasing its market share in the EU to 24 percent High inflation and rising interest rates are the main current drivers of the global economy, but the core
in 2022 from 18.5 percent in 2017. problem of the textile supply chain in 2023 is high inventories at the brand and retail levels.
With the opening of economies around the world after the COVID crisis, consumers had the opportunity to
spend the money they could not during 2020 and in the first half of 2021. Consequently, demand soared, and
brands and retailers increased orders to meet this pent-up demand. With inflation rising, especially after the
The global cotton scenario all around Russian invasion of Ukraine in February 2022, demand for consumer goods slowed while inventories
remained very high.

the world; rates & fluctuations November 2021. In January 2023, the indicator was negative in all regions and segments except for North &
Respondents to ITMF’s 18th GTIS survey confirm that order intake has continuously decreased since
Central America and fiber producers. The latter saw orders rise for the first time since last summer. The
previously high global order backlogs also steadily decreased from 3.1 months in March 2022 to 2.4 months
in January 2023, mainly due to brand and retailers’ restraint to place orders. The dampening effects of the
Stability in cotton rates prevailed in the Pakistani market last week. The spot rates remained unchanged in the earlier supply chain disruption further helped reduce order backlogs by improving global trade flows which
Karachi and Punjab markets, the 37.5 kg prices ranged from Rs 19000 to Rs 2300 in Karachi and from Rs led to a slight rise in the capacity utilization rate worldwide (mostly driven by fiber producers and spinners).
19500 to Rs 22000 in Punjab.
Expectations in 6 months-time have soared and respondents are globally positive about business in June
It is interesting to note that though the price of cotton was higher in Sindh the rate of Phutti in Sindh was higher 2023. Textile manufacturers expect a better situation due to two important factors. First, the world is now in a
than in Punjab. Phutti was sold in Sindh between Rs 6,500 to Rs 9,500 per 40 kg. The rate of Phutti in Punjab much better energy situation with a relatively mild winter in Europe and energy prices in Europe and Asia
ranged between Rs 7,500 to Rs 10,500 per 40 kg. (especially for gas) dropping back to levels seen before Russia’s invasion of Ukraine. Second, the sudden
end of the Zero-Covid policy in China with a swift opening of the borders is promising strong demand in
In the United States market, March futures had a mixed week, remaining in the back-and-forth trading range China as well as abroad (more tourists and imports of goods). Everything else being equal, the global
that has been present for the past few months. Overall, most commodities had a good start to the week, with economy will see a higher growth level than expected and this will benefit the global textile industry.
cotton, in particular, finding support from China. After falling under pressure from the Fed’s interest rate
increase that was announced later in the week, the U.S. Export Sales Report helped boost prices to finish the
week on a high note. March futures closed at 86.39 cents per pound, down 111 points for the week ending
February 2. Open interest rose modestly, increasing 1,043 contracts for a total of 210,416.

January/February 2023 January/February 2023