Apparel exports declining in major export destinations

Al Amin  :
Concern is growing up in the country’s readymade garment (RMG) industry as demand for apparel items is declining in major export destinations due to higher inflation caused by Russia-Ukraine war.
Moreover, the industry will have to take preparation for facing new global trade policies that are adopting in the developed nations.
Besides, the industry is currently facing various crisis including sufficient gas and electricity supply, raw material shortage and higher production cost, the entrepreneurs of the sector said.
Md Shahidullah Azim, Vice-President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told The New Nation, “Inflation has reached a record high in our major export markets, especially European countries and USA. Following this, the consumers of these developed countries have reduced spending on consumer goods.” “So, the importing brands have already reduced order of apparel items,” he added. “Besides, we need to take sufficient preparation for the global trade policies that are adopting in the developed nations. Otherwise, the sector will fall into a big crisis,” Azim said.
European countries are adopting human rights and due diligence protocols and Bangladesh need to build capacity to uphold the rules. Amid the situation, RMG exports have declined in last month and it may decrease further in coming months, the entrepreneurs apprehended.  Export earnings from the apparel sector reached $35.25 billion during July- March period of the current fiscal year up from $31.42 billion in July- March of last year indicating 12.17 per cent year over year growth, according to data of the Export Promotion Bureau (EPB).
A category-wise disaggregated analysis shows that the export of knitwear was $ 19.13 billion with 11.78 per cent and the export earnings from woven garments reached $16.11 billion with 12.63 per cent growth compared to the same period of last year.
But, in single month March this year, the RMG export declined by 1.04 per cent to $3.89 billion from $ 3.93 billion in March, 2022.
“Since the RMG export orders started to decline, the single-month export earnings showed negative growth. The export may falter further in the coming months since the retail sales in our major export markets has already been affected by high inflation and other economic turmoil,” BGMEA Director Md Mohiuddin Rubel.
Along with the external factors, the RMG sector, 84 per cent contributor to the national export earnings, is facing some internal crisis include insufficient gas and electricity supply, the entrepreneurs said.
They said that, they are paying more for the energy supply but the supply is yet to be improved.
“We are paying more for gas but the gas supply situation has not improved. In this situation, the cash flow of many factories has come to a negative state. It will be tough to survive in this situation,” said Mohammad Ali Khokon, President of the Bangladesh Textile Mills Association (BTMA).
The government hiked gas price for industries up to 179 per cent since February this year promising uninterrupted gas supply and the industry owners have been paying the increased price for gas, along with increased electricity prices, but are not getting the promised uninterrupted gas supply.
In this situation, the entrepreneurs fear that they will fall behind in competitiveness and some industrial factories may be forced to close down due to losses.