Home Apparel Apparel exports to US drop

Apparel exports to US drop

Garment shipment to the US, the country’s single largest export destination, declined 7.47 percent year-on-year to $5.2 billion in 2016-17 largely because of higher duty, longer lead-time, and lower prices.Apparel exporters also blamed the appreciation of the local currency against the American greenback, less imports by US retailers and inefficient port operations in Bangladesh, for the fall in garment exports.Exporters say Bangladesh’s garments are less attractive to US customers as competing countries can offer similar items at lower prices since they enjoy preferential duty privilege.Bangladeshi apparel exports face 15.62 percent duty to the US markets, whereas Vietnam, Turkey, China and India are subjected to 8.38 percent, 3.57 percent, 3 percent and 2.29 percent duty respectively. Longer lead-time is another major problem confronting Bangladesh whereas competitors can send to the US within a shorter time.Bangladesh takes nearly three months to export to the US whereas competitors can supply the same products to the US within 60 days or less. International retailers have also cut the lead-time for Bangladeshi exporters.  Previously, international retailers and brands used to place work orders with Bangladeshi manufacturers with a six-month lead-time, but now it has gone down to two to three months due to the ‘fast fashion’ in the Western world.Bangladesh needs to import raw materials such as cotton and spin them locally before making the finished products. A lack of adequate skilled workforce is another drawback.As a result, many small and medium-sized factories cannot take orders to cater to retailers within such a short time, said exporters.Fast fashion is a contemporary term used by fashion retailers to capture current fashion trends.Retailers and brands also put pressure on manufacturers to cut prices in the name of fierce competition although the cost of production is increasing by 18 percent every year.The country’s garment sector was hit with 15 percent price cut in the last two years, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).A few US brands and retailers also withdrew work orders of substantial quantity from Bangladesh last year as they faced criticism from customer groups for sourcing their products from Bangladesh where labour conditions are regularly criticised, said industry insiders.In recent years, the US-Bangladesh relations deteriorated, largely after Washington suspended trade privileges for the country in 2013 for “serious shortcomings” in safety and labour standards.Since then, Bangladesh has been working to improve labour rights situation and workplace safety to win back the generalised system of preferences. “We are also facing troubles at the airport and the Chittagong port,” said Faruque Hassan, vice-president of the BGMEA. “It takes four or five days to get the samples out of the airport whereas we need the samples within a day,” he said.Similarly, the situation at the Chittagong port worsened because of container congestion. The country’s premier port cannot release imported goods to garment makers even in two weeks, according to Hassan.“All these things are making Bangladesh a least preferred garment nation,” said Mohammed Nasir, managing director of Evergreen Sweater.

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