RMG export rebounds, with US market upswing

Bangladesh's apparel exports to its single-largest destination-the United States-marked over 42-percent growth to US$9.06 billion during the first eleven months of 2022, as a wind of change blows over the world after the corona havoc.

Bangladesh had shipped clothing items worth US$6.36 billion during January to November of 2021, according to figures from OTEXA, an affiliate of the US Department of Commerce.

The US imported 2.93-billion- square-meter apparel from Bangladesh during the period, which was about 26-percent higher from 2.33 billion square meters shipped in the corresponding period of 2021.

The overall US import of apparel during the first eleven months from the world increased 25.72 per cent to US$93.39 billion, the OTEXA data show.

Industry-insiders say high demand for Bangladeshi RMG products, a significant rise in prices of raw materials that add up to value of the finished products, and buyers' confidence in the local industry's resilience and compliance have helped the exports grow both in terms of quantity and earnings since October 2021.

However, they mention an interim upest with the demand for apparel items having gone on a downturn last July and August while buyers kept on hold some orders in September due to economic slowdown and high inflation in major markets, resulting in huge inventory.

In a turnaround, orders from global buyers are bouncing back as previously they had projected for the upcoming season.

When asked, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan told the FE that the performance of local readymade garments in the USA was good in consideration of both the local and global economic situation.

The BGMEA president attributes 'apparel diplomacy' they have been following to the push in RMG- export earnings.

"Besides, high prices of raw materials have raised the unit prices of apparel while local makers are producing value-added items that also helped in increasing the earnings," he says explaining the country's main export-industry situation in the trying time when financial crunch troubles the globe and Bangladesh also walks a tightrope to make ends meet.

In September, some buyers put their shipments on the backburner which were also shipped in November, he adds.

Furthermore, Bangladesh bagged some orders shifted from China, the BGMEA president said, evidently amid the China-America trade spat. Also, buyers showed their confidence in sourcing apparel from the country as entrepreneurs kept the supply-chain activities running immediately after the lockdown enforced during the Covid invasion.

Moreover, the industry has a huge investment in improving workplace- and other-safety works, he notes.

The OTEXA data show that China's overall apparel export to the US during January to November 2022, however, grew by about 15 per cent to US$20.51 billion.

On the other hand, US apparel imports from Vietnam and India during the first  eleven months of 2022 witnessed 29.17-percent and 39.49-percent growth to US$17.05 billion and US$5.32 billion respectively, according to OTEXA data.

During the period, Cambodia witnessed about 31-percent and Indonesia 40-percent growth to the US market, the trade data show.

Source: FE