05 September 2023, Mumbai
Headwinds and tailwinds for Bangladesh's apparel exports
- Headwinds:
- Devaluation of the national currency, making raw materials and machinery imports expensive
- Energy crisis
- Decline in orders and being squeezed price-wise
- Tailwinds:
- US-China trade war, making Bangladesh a preferred replacement for China
- Bangladesh's move to portfolio diversification and value-added items
- Bangladesh's continued production during the pandemic
- Bangladesh's ability to move away from basic to value-added garments
- Bangladesh's efforts to meet sustainable standards
Good tidings for Bangladeshi exporters
- A 15% year-on-year growth in apparel exports in April 2023
- The US is the main driver of this growth, as it is reducing its reliance on Chinese imports
- Bangladesh is also benefiting from the Sino-US trade war
- However, Bangladesh is not the only country that is benefiting from this situation, and it is important to remain competitive
Bangladesh has remained dependable
- Bangladesh continued production during the pandemic, even when other countries were shutting down
- This earned the trust of importers, who are now looking to Bangladesh as a reliable supplier
- Bangladesh has also shown its ability to move away from basic to value-added garments
The year 2023 may not live up to expectations
- Despite the good news, the President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is not convinced that 2023 will be a good year for apparel exports
- This is because garment imports by the US and the EU have declined in the first five months of the year
Conclusion
- Bangladesh's apparel exports are facing both headwinds and tailwinds in 2023
- The country needs to continue to diversify its products and meet sustainable standards in order to remain competitive
- However, the long-term outlook for Bangladesh's apparel exports is positive, as the country is well-positioned to benefit from the US-China trade war and the growing demand for apparel from emerging markets.
