The sweater suppliers in Bangladesh are experiencing a somewhat slow season as a result of a dry weather that has lasted in European countries for a longer period of time than is typical and the higher cost of living that has been exacerbated by the conflict between Russia and Ukraine.
Temperatures of up to 30 degrees Celsius are being recorded in some parts of the continent as a result of climate change, which is highly unusual given that the month of September is typically considered to be the end of summer in Europe because summer officially ends in June. This is because more than 60 percent of the garments that are exported from Bangladesh are produced in these regions. A sweater is a piece of winter clothing; sales of heavier sweaters tend to be greater when the season is colder, whereas sales of lighter sweaters tend to be higher when the winter season is warmer.
According to the BBC, which cited a report from the Global Drought Observatory, which is part of the research wing of the European Commission, in late August, it was reported that two-thirds of Europe was under some sort of drought warning, in what is likely the worst such event in 500 years. This was based on the fact that two-thirds of Europe was under some sort of drought warning. Conditions were becoming more dangerous in Italy, Spain, Portugal, France, Germany, the Netherlands, Belgium, and Luxembourg, as well as the United Kingdom. An additional factor is the rise in inflation. The average person’s ability to make purchases has been hampered as a result of inflation in the eurozone, which reached 9.1 percent in August, up from 8.9 percent in July. As a direct consequence of this, apparel manufacturers and retailers in Europe are either postponing the placement of new work orders in Bangladesh or putting less orders overall as a direct effect of the slowdown in sales.
According to Shahidul Islam, managing director of Rupa Group, a major sweater exporter, “International retailers and brands are making delays in taking the delivery of products for which orders were placed between December and March, citing piling up of unsold stocks.” The orders in question were placed between December and March. For example, a large European company that sources sweaters and purchases about $2 billion worth of the item annually from Bangladesh has halted its efforts to secure finished goods because of the current political situation.
“In addition, a significant number of European companies and merchants have pulled out of the Russian market entirely. The sourcing of knitwear from Bangladesh has also been impacted as a result of this “Islam said. He attributed the decrease in sweater sales to the protracted summer season. The Rupa Group was responsible for the shipment of knitwear valued more than $16 million last year. Bangladesh’s sweaters find a significant amount of demand in the Russian market. In addition, the war, which started in February of this year, has had a significant impact on the cargo. Since November, Md Rezwan Selim, the managing director of another sweater supplier called Softex Sweater, has acknowledged that the company has been receiving less orders from international buyers.
He said, “This is quite uncommon for my factory.”
Even though the business owner has expressed his optimism that things would change for the better starting in January, no one can predict how long the conflict in Ukraine will last. Because of the war, the continent has been experiencing a significant energy crisis because Russia has mostly ceased the supplies of affordable natural gas. The situation has the potential to lead to rolling blackouts, closed factories, and a deep economic downturn. In the past, Russia was responsible for providing 40 percent of Europe’s natural gas.
The fact that summer lasted longer in Europe and that heat waves persisted across the majority of the continent all the way up until the end of August did not have a direct effect on the quantity of sweaters that Dragon Sweater & Spinning exported.
“However, some clients have created delays in taking the delivery of goods,” said Mostafa Quamrus Sobhan, chairman of the exporter. “Some customers have made delays in taking the delivery of goods.”
On the contrary, as temperatures continue to plummet across Europe, sweaters have started to become more popular in retail outlets.
After the holiday shopping season is done, a fuller picture of the actual impact will emerge. This is due to the fact that uncertain climate change can potentially generate very harsh winters. “The persistent lack of gas across Europe could result in the restriction of utility services, which would entail fewer people using heaters in their homes and places of business. Because of this, buyers could feel compelled to purchase warmer clothing throughout the winter season “Sobhan stated.
A number of exporters believe that Bangladesh’s sweater export to Europe will not be significantly impacted by the growing likelihood that Europe will enter a recession because the nation produces the items for low-end markets, despite the fact that the risk of Europe entering a recession has increased. However, it would appear that shipments to the markets of Ukraine, Russia, and Poland have been affected negatively as a result of the ongoing geopolitical turmoil.
According to Sobhan, the future of sweater export for winter 2023 could indeed be unknown if the battle continues for a longer period of time than originally anticipated. As per Euronews, Poland’s largest apparel retailer LPP, which is a significant buyer of Bangladeshi sweaters, closed its outlets in Russia in March after Russia invaded Ukraine. LPP is a major consumer of Bangladeshi sweaters. The revenue generated by sales in Russia contributed 19.2 percent to the total revenue generated by the group in 2021-22.
According to exporters, the closure of stores in Bangladesh has had an impact on the export of sweaters from that country. The value of sweaters that Bangladesh exported in its most recent fiscal year, 2021-22, was $5.64 billion, representing a year-on-year increase of 39.25 percent. According to data provided by the Export Promotion Bureau, the amount was $4.05 billion in 2020-21.
Reference:
Mirdha, Refayet Ullah. “Sweater Exporters in Hot Water.” The Daily Star, 16 Sept. 2022, https://www.thedailystar.net/business/economy/news/sweater-exporters-hot-water-3120636
