Amidst a slew of dismal news, from the rise of inflation to a grim prognosis of the global economic slowdown, the substantial growth of prices against apparel export from Bangladesh to the USA and the EU region is undoubtedly uplifting. As per a TBP report alluding to data published by the United States International Trade Commission, USITC, and Euro Stat, in the first nine months of the current fiscal year, RMG export growth to the USA and the EU region was 6.5 per cent and 10.7 per cent respectively.
Relevant to note, Bangladesh’s apparel sector export to the world market was worth $38.52 billion with 34.87 per cent growth during the July-May period of the current fiscal year. Export Promotion Bureau, EPB, states that around 21 per cent came from the US and 50 per cent from the European Union.
In this period, the average unit price rose by 6.5 per cent to $3.3 for the US market, which was $3.1 for the same period in the last fiscal. For the European market, per kilogram of clothes was bought for Euro 14, which was Euro 12.6 for the same timeframe in the last fiscal.
Naturally, the data paints an uplifting picture for our apparel industry. However, it must be stated that the optimistic figures are due to buyers temporarily leaving other manufacturing nations as a result of Covid-19-related lockdowns, prolonged shutdowns of factories, and political turmoil.
Fortunately, the corona-induced pandemic recovery in Bangladesh has been swifter than in many other countries, leading to the complete opening of factories and prompting buyers to come here. What is needed now is to ensure that these buyers who came to us due to unforeseen circumstances do not take away their orders in the future.
Undoubtedly, the RMG industry has been a critical factor in propelling the economic boom of Bangladesh. However, in a world post-Covid and polarised by the Ukraine conflict, trade dynamics will also see a sharp shift.
In such a scenario, with big buyers looking for alternative manufacturing destinations, Bangladesh can emerge as a preferred country due to its low production costs. Bangladesh is also offering several special economic zones with world-class features.
The BGMEA’s comment that Bangladesh should bargain more to get the best price is a suggestion that must be taken seriously. Often, due to the failure to persuade through convincing arguments, we do not get the best price for products, which eventually adversely impacts wages and workers’ bonuses.
To counter this, ‘Brand Bangladesh’ has to be promoted with the right mixture of business attraction and marketing oomph. The data relating to RMG exports from last year till now may be heartening. However, with the war in Europe becoming protracted, Bangladesh has to be prepared for a possible decline in orders.
Anticipating a potential pitfall and acting on it pre-emptively minimises the repercussions. For a good reason, the priority for the government should be to seek out new markets in Africa and South America. Bangladesh government had earlier expressed a desire to open new embassies, which can be pursued now following market assessment.
If opening new missions overseas clashes with current austerity drives, appointing consul generals can be a viable option. These officials can come to Bangladesh and return to work to publicise the RMG expertise.
One downside of RMG production in Bangladesh, regularly underlined by industry insiders, is reportedly the unreliable availability of raw materials. Experts suggest that with a robust supply chain mechanism, this too can be remedied.
It makes sense to follow a two-pronged approach – seeking new markets overseas and securing a robust supply chain operation for raw materials.
