In the first six months of the current year, Bangladesh’s garment exports to the European Union market have increased. However, this trend is expected to decrease in the coming months.
Exporters say the number of work orders in Bangladesh’s ready-made garment sector is estimated to have decreased by 20 per cent in the last few months.
Recently, the European statistical agency’s Statistical Office of the European Communities (EUROSTAT) has released the latest statistics on EU clothing imports for the period January-May 2022.
After the global pandemic of Covid-19, the world economy started normalizing. Meanwhile, the Russia-Ukraine war
affected the economy. The international market system is in danger of collapsing. Inflation has appeared in the world. The prices of daily commodities are increasing due to the shortage of various items including fuel. Consumers in Europe have also cut back on clothing purchases amid economic turmoil.
According to statistics, EU imports from Bangladesh increased by 44.95 per cent to US$9.58 billion during the mentioned period. During this period, European countries’ global apparel imports increased by 24.37 per cent.
At the same time, EU apparel imports from China, which dominates the international ready-made apparel market, rose 20.67 per cent year-on-year to $10.19 billion.
Other countries with significant growth are Cambodia 32.68 per cent, Pakistan 29.28 per cent, Indonesia 25.36 per cent, Vietnam 22.34 per cent and Morocco 20.05 per cent. So far these figures of EU imports indicate the good position of Bangladeshi garments in the European Union market.
However, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Director Mohiuddin Rubel said that the growth rate of garment exports and income may decrease in the coming months.
He said, “People are struggling for livelihood now. Buyers are not putting more pressure on their customers, they are putting more pressure on us. Even if our cost increases, we are not getting more price.”
Mohiuddin Rubel said that orders have already started to decrease. There is a risk of further decline ahead. Post-corona growth will be difficult to sustain due to global inflation. Because people have developed a tendency not to buy. There is a trend of not going to the market.
In a statement to the media in this regard, he said, due to recent geopolitical tensions, retailers are struggling to adapt to the rising inflationary world market. A number of European brands have seen a decline in retail sales which has increased their inventory stocks. Considering all these factors, Bangladesh’s garment exports to the European market may show a declining trend in the coming months.
Experts say that due to the increase in global price inflation due to the effect of the Russia-Ukraine war, the garment traders have to go towards an overall uncertain situation. Meanwhile, Western consumers have also become more mindful of their personal spending.
In this context, BGMEA President Faruque Hassan said that international retailers and brands ordered 20 per cent less from September to November last year than the amount they ordered from March to June this year. Retailers are not able to sell products to the customers there as before.
He also mentioned that consumers are forced to buy fuel and food at higher prices than before. In this they reduced the clothing budget.
He said that the price of gas in the United States and the European Union has increased almost three times. Garment supplying countries such as Bangladesh have been hit by rising fuel and food costs.
The Association President mentioned that utilization declaration (UD) has decreased by 20 per cent in the coming spring and summer seasons.
In addition, according to EUROSTAT, the European Union’s main market for ready-made clothing, inflation in the region stood at 8.9 per cent at the end of July. This is the highest in the last 25 years. Mainly due to record inflation, the demand for clothing in these countries has decreased.
According to data from the Export Promotion Bureau (EPB), products worth about $3.98 billion were exported in July. It was $4.91 billion in June. In other words, exports decreased by $ 93 million within a month. Again, the export target was $5.5 billion per month.
Regarding the current recession and crisis, the Executive President of Knitwear Manufacturers and Exporters Association, the top organization of the knitwear sector, Mohammad Hatem said, “Currently one of the government’s income sectors is export. However, new orders are not available from buyers for other products including clothing. Even ongoing orders are being put on hold. We are going through tough times.”
He said, “We are suffering in many ways including international problems. Production is decreasing due to gas shortage. Due to this, instead of exports, imports are increasing. The government will be affected by this, we are being affected. Export orders are falling, no new orders. The cost of materials has increased, the cost of production has increased. While business is said to be easy, business is getting harder.”
Meanwhile, due to the abnormal increase in fuel prices, the production cost of garments has increased by about 20 per cent. Electricity and gas crisis has adversely affected this sector which is the main export income of the country. In the meantime, Walmart, the country’s largest clothing buyer, has started cancelling global orders. It has hit the country as well. Businessmen in this sector say that it will be difficult for the factories to handle this pressure. However, they are currently monitoring the situation.
