According to data from the Bangladesh Bank, the value addition in export-oriented ready-made garment (RMG) goods grew in the second quarter (October-December) of the current fiscal year 2022-23.
The import value of raw materials – raw cotton, synthetic/viscose fiber, synthetic/mixed yarn, cotton yarn, and textile fabrics and accessories for garments was $4,110.42 million in October-December of FY23, accounting for 32.31% of total RMG export earnings, based on a study titled “Quarterly Review on RMG: October-December of FY23” published by the central bank.
As a result, net exports from this sector was $8,611.93 million in the second quarter of FY23, representing a 62.79% increase over the previous quarter and a 37.43% increase over the same time the previous year.
Moreover, the value addition in the readymade garment (RMG) industry improved by 11.3% over the previous quarter and by 10.43% over the same quarter of the last FY.
The central bank data also showed that the total export earnings from Readymade Garments (RMG) stood at $12,722.35 million in October-December FY23 (Woven $5712.13 million and Knitwear $7010.22 million), which was 23.83% and 17.35% higher than that of the previous quarter and the same quarter of last year, respectively.
The report also said that the United States, Germany, the United Kingdom, Spain, France, Netherlands, Italy, Canada and Belgium were the top destinations for Bangladesh’s RMG exports during July-September of FY23.
From these nine countries, Bangladesh earned $7.43 billion from RMG, accounting for 72.25% of total RMG exports.
The report also said that the main destinations of Bangladesh’s RMG exports are the USA, Germany, UK, Spain, France, Italy, Netherlands, Canada and Belgium.
During October-December of FY23, the RMG export earnings from these nine countries stood at $9,020.44 million (woven 43.05% and knitwear 49.07%), nearly 71% of total RMG exports.
RMG export earnings from these nine countries increased remarkably by 21.53% and 13.38% as compared to that of the previous quarter and that of the corresponding quarter of the preceding fiscal year, respectively, the report showed.
Despite slow growth worldwide, RMGs’ export earnings grew by 6.74% higher than that of the quarterly target.
However, the report warned that the export momentum seen in this quarter may face some challenges in the upcoming periods as the global inflationary pressures are now badly hitting our major export destination countries.
A number of initiatives have been done by the government and Bangladesh Bank, particularly the pre-shipment credit, incentives for export expansion, Extended Facilities for Trade Transactions and Green Transformation Fund (GTF).
The central bank recommended Bangladesh explores more new global markets and improve its production capacity by introducing modern technology and facilitating the backward linkage industries.
Moreover, they also recommended emphasizing on skill development of the RMG workers to prepare and face the ongoing global crises and rapidly changing environment of production technologies.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said that they are currently producing value-added items and the exports to non-traditional markets have also increased.
“We are currently producing value-added items. If we talk about a jacket; now garment manufacturers are exporting jackets at prices around $35-$40, but earlier, they did not receive orders for $30 above valued jackets orders,” he explained.
It indicates that the country is shifting to the production of value-added apparel items from basic ones, he added.
In the last fiscal year (2021-22), Bangladesh exported apparel items worth $42.61 billion to its global destinations.
