Exports to EU grow by 44.6% in H1 of 2022

Bangladesh has achieved 44.6 per cent growth in readymade garment export to the European Union (EU) market in the first six months of the current year, compared to the same period of the last year.

Bangladesh’s apparel sector holds a 23.69 per cent market share of total readymade garment imports of the EU in the January-June period of 2022, thanks to the GSP facility, value addition and strong marketing, according the Eurostat, the European Union’s statistics agency.

During the time, Bangladesh was the second biggest apparel exporter to the EU with China being the first.

Eurostat data shows that the region imported apparel worth $47.76 billion in the January-June period of 2022, and Bangladesh exported $11.31 billion of the goods to the EU.

From January to June of 2021, Bangladesh exported worth $7.82 billion of apparel goods to the EU while the 27 member states of the union imported worth $38.2 billion of clothes during the period.

China exported worth $12.23 billion of the readymade garment during the first half of 2022, which is 25.6 per cent of total EU imports.

Turkey and India consecutively exported $6.1 billion and $2.76 billion of clothes to the market during the period, according to Eurostat.

Industry insiders, however, said that though they are continuing to hold the second position and their export share on the market has increased, EU buyers are reducing purchase orders due to the ongoing global economic crisis.

Even now, many brands are deferring shipments due to the crisis, affecting Bangladesh’s apparel export earnings heavily.

“The EU is our top export earnings destination and we are trying to be the number one in the market. But due to the ongoing economic crisis and high inflation in the EU, our earnings are dropping,” Fatullah Apparels chief executive officer Fazlee Shamim Ehsan told The Business Post.

He said, “Though our earnings are declining, hopefully, our position will remain secured.”

Inflation in the Eurozone reached double-digits setting a new record high in September, according to preliminary data of Eurostat, as the Russia-Ukraine war is inflicting a heavy toll on European economies.

The agency estimates that Euro area annual inflation is expected to be 10 per cent in September 2022, up from 9.1 per cent in August.

It should be noted that the euro area consists of Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. The other eight countries of the union do not use Euro as their currency.

The latest hike in prices was of energy — the cost of which is now 40.8 per cent higher compared to the same month of the last year — while prices for food, alcohol and tobacco have soared by 11.8 per cent year-on-year.

The Eurostat data shows that Bangladesh secured a top position in the EU market, comparing growth rates with other countries.

In January-June period of 2022, Bangladesh achieved 44.6 per cent export growth in the market while the EU’s total apparel import growth was 25.03 per cent.

The data shows that Cambodia secured 40.15 per cent growth, Pakistan 32.28 per cent, Indonesia 28.64 per cent, India 24.9 per cent, Vietnam 23.49 per cent, China 21.78 per cent and Turkey 20.38 per cent during the period.

“The surge in EU’s f import is caused mainly by recovery from the pandemic. Increased shopping by consumers resulted in retail sales growth,” said Mohiuddin Rubel, director of Bangladesh Garment Manufacturers and Exporters Association.

“However, the upward trend might not sustain in the following months of 2022 due to inflation at a historic level. The price hike of fuel and food, and the downturn in economic growth than projections indicates a recession,” he added.