International Hits: 905

Bangladesh's apparel exports: An overview

International Hits: 905
BangladeshApparelFactory
International Hits: 905

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.

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