Price deflation pressures RMG sector
Staff Reporter :
The outlook for Bangladesh’s apparel sector in the global market remains positive, with work orders expected to rise, sustaining growth momentum into 2025.
However, a substantial 8.98 percent rise in import volume was accompanied by a 6.83 percent decline in average unit prices, exerting downward pressure on major sourcing countries, including Bangladesh.
Industry insiders have indicated that buyer confidence is recovering, leading to an expansion of sourcing activities in Bangladesh, which will help maintain this upward trend.
Official data shows that the European Union’s apparel imports between January and December 2024 experienced a modest 1.53 percent increase in value, reaching $92.56 billion.
Several factors have contributed to the steady rise in export volume and value, including the production of high-value garments, duty-free market access, compliance with workplace safety standards, and the concerted efforts of manufacturers and workers.
These developments have reinforced buyer confidence, strengthening Bangladesh’s position as a key player in the global apparel export market.
Despite fluctuations throughout the year, with a slow start followed by a surge in the final quarter of 2024, Bangladesh recorded substantial year-on-year growth in October, November, and December. This positive trajectory, coupled with increasing exports, continues to drive the sector’s expansion.
However, while 2024 showed an improvement over 2023, export earnings have yet to reach the levels recorded in 2022.
RMG items, as usual, overwhelmingly dominated the country’s export earnings by recording a 10.64 percent growth in the July-February period.
The sector fetched $26.79 billion against $24.21 billion during the corresponding period.
Comparatively, China’s apparel exports to the EU grew by 2.61per cent in 2024, while Pakistan and Cambodia experienced more substantial growth rates of 12.41per cent and 20.73per cent, respectively. China’s apparel exports totaled $26.07 billion in 2024, up from $25.40 billion in the previous year. Conversely, Turkey saw a 6.64 per cent decline in apparel exports to the EU, amounting to $10.07 billion, while Vietnam recorded a 4.21per cent increase, reaching $4.30 billion. Pakistan and Cambodia secured $3.79 billion and $4.22 billion, respectively, from the EU clothing market. Additionally, India’s apparel exports to the EU reached $4.52 billion in 2024, marking a 1.97per cent increase from 2023.
“In conclusion, while Bangladesh has demonstrated resilience in sustaining its export volume and value, the data underscores the need for strategic shifts to ensure future growth,” said Mohiuddin Rubel, Former Director of BGMEA and Managing Director of Bangladesh Apparel Exchange Ltd. and Denim Expert Ltd.
He emphasized that value addition and market diversification are crucial for Bangladesh to maintain its competitive edge and protect profit margins amid ongoing global price deflation.