Home ›› 29 Apr 2022 ›› Front
Apparel exports to the European Union (EU) and US have shown excellent performance in the first nine months of FY22, helping Bangladesh’s earnings in the sector grow by 33.8 per cent year-on-year despite circumstances triggered by the Russia-Ukraine war.
The country earned $31.43 billion from apparel exports between July and March this FY, compared to $23.49 billion in the same period last year. Though the war rages on, Bangladesh’s apparel exports to Russia showed a positive year-on-year growth of 22.68 per cent.
In the nine months of FY22, the country exported apparel goods worth $503 million to Russia, while the figure was $410 million the same period previous year, shows data from the Export Promotion Bureau (EPB).
Speaking to The Business Post, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan said, “We are happy for the export growth in this sector, but many buyers are still not practicing fair price.”
Meanwhile, industry insiders said export earnings from Russia will decrease eventually due to the Russia-Ukraine war, but apparel makers will be able to recover any lost earnings from other markets.
They however added that factories have been rejecting work orders due to a persistent labour shortage.
Status of EU, US markets
During the July-March period of FY22, Bangladesh’s earnings from apparel exports rose by 53 per cent year-on-year to $6.56 billion in the US market and 31.51 per cent to $15.76 billion in the EU market, data from the EPB shows.
Besides, in the same period, the country had earned $3.37 billion and $925 million from UK and Canada markets respectively. Bangladesh had posted $4.31 billion and $11.98 billion in apparel export earnings from US and EU markets respectively in the nine months of FY21.
In this fiscal year, earnings amounting to billion dollars or more came from eight countries, which came from six countries in the same period last FY.
The apparel sector earned $3.93 billion in March this year, growing 60.14 per cent from $2.45 billion in March 2021.
Industry leaders said the outstanding performance of Bangladesh’s apparel sector was possible due to the energy crisis and recent Covid-19 lockdowns in China, and the political crisis in Myanmar.
They added that the recent devaluation of taka against USD also makes apparel exporters stronger.
On the matter, Ananta Garments’ Managing Director Inamul Haq Khan Bablu said, “Bangladesh is now an alternative hub for apparel products, which has helped increase the country’s export earnings.
“Though we lag behind in terms of lead time, we are producing good quality clothes at cheaper prices. This is helping us boost our exports. However, the problem is that we do not have enough workers, which is detrimental to the sector.”
Abdulla Hil Rakib, managing director of Team Group and a BGMEA director, said, “After withdrawal of Covid restrictions in the western region, buyers did not have enough clothes in their stores. The same time, China faced an energy crisis and Vietnam imposed Covid-19 lockdown.
“This string of events helped us receive a large volume of work orders, but this trend will decline after the end of this year.”
A number of apparel exporters pointed out that though their earnings have increased by value, the profit margin did not increase. They added that amid the pandemic, freight fares rose by four to five times, yarn prices almost doubled, and cost of other materials rose 5 to 10 per cent.
Exporters claimed that due to the abovementioned factors, their manufacturing cost has increased by around 40 per cent.
On the issue, BGMEA President Faruque Hassan said, “I asked buyers to practice fair price. I also asked my member factories not to sell clothes without a minimum profit margin. We have to understand that buyers are bound to come to Bangladesh because of cheap prices.
“If we are able to increase our capacity for price negotiation, our profit margin will increase too.”
