Bangladesh’s apparel exports to its two top markets – the United States of America and Germany – declined in July-January period of the current financial year 2022-23 due to the global economic slowdown.

Exporters said that the readymade garment sector experienced decreased export orders since July 2022 due to the global economic uncertainties caused by the Russia-Ukraine war.

After four months of downward export orders, the RMG sector started receiving increased orders from November which started going down further from January, they observed.

According to the Export Promotion Bureau data, the country’s RMG exports to the US, the largest export destination for Bangladesh, in the eight months of FY23 fell by 2.87 per cent to $5.60 billion from $5.77 billion in the same period of FY22.

Export of knitwear in the US market declined by 16.68 per cent to $1.70 billion in the period.

Md Fazlul Hoque, a former president of the Bangladesh Knitwear Manufacturers and Exporters Association, told New Age on Saturday that the export of knitwear decreased significantly in the US market due to the economic slowdown.

He said that a few months ago the Bangladeshi suppliers increased the quantity of export of knitwear products to the US and a portion of its remained unsold in the retail stores.

Apparel exports to Germany, the second largest export destination for Bangladesh, in July-February of FY23 declined by 1.03 per cent to $4.63 billion from $4.68 billion in the same period of FY22.

Apparel exports to Poland in the first eight months of FY23 declined by 15.06 per cent to $1.09 billion from $1.28 billion in the same period of FY22, the data showed.

Exporters said that a portion of Bangladeshi apparel imported by Poland was re-exported to Russia and the business remained suspended due to the war.

The EPB data showed that the total RMG export to the European Union in July-February of FY23 grew by 14.29 per cent to $15.72 billion from $13.76

billion in the same period of FY22.

Bangladesh’s RMG exports to the United Kingdom, the third largest export destination for Bangladesh, in the first eight months of FY23 grew by 14.52 per cent to $3.36 billion from $2.93 billion in the same period of FY22.

‘The western economy is facing a serious blow caused by the Russia-Ukraine war and the demand for apparel has been decreasing,’ said Arshad Jamal Dipu, chairman of Tushuka Group.

He said that buyers had been placing orders 30 per cent less than what they did in the previous year and some buyers had been holding the shipment of finished goods.

The businessman said that the increase in policy rate by the Federal Reserve System of the United States indicated that the global economy was facing a severe setback.

Recently, Bangladesh Garment Manufacturers and Exporters Association president Faruque Hassan claimed that that the flow of global orders started decreasing again due to an economic slowdown in the importing countries.

He said that many global buyers are placing orders in small quantities, some are putting their work orders on hold and some are putting their shipments on hold as retailers had stockpiles of apparel items in their stores due to high inflation.

The BGMEA president, however, hoped that non-traditional markets would be helpful to offset the export loss in the major markets in coming days.

According to the data, the share of non-traditional market in total earnings from apparel exports increased to 18.13 per cent in July-February of FY23 from 15.32 per cent in the same period of FY22.

Apparel exports to the non-traditional markets in eight months of FY23 grew by 35.02 per cent to $5.68 billion compared to $4.21 billion in the same period a year ago.

Among the non-traditional markets, Bangladesh’s readymade garment exports to India, Japan and South Korea witnessed a substantial growth in July-February period of FY23.

RMG exports to Japan in the first eight months of FY23 grew by 47.65 per cent to $1.07 billion compared to $728.65 million in the same period of FY22.

The country’s readymade garment exports to India in July-February of FY23 grew by 61.57 per cent to $753.92 million from $466.61 million in the same period of FY22.

The EPB data showed that RMG exports to South Korea in eight months of FY23 increased by 39.81 per cent to $387.63 million from $277.25 million in the same period of FY22.

SM Khaled, managing director of Snowtex Group, said that the EU and the US buyers and brands were sitting on stockpile as consumers had decreased buying apparel due to high inflation.

He stated that this year manufacturers were eagerly waiting for work orders whereas they refused orders at the same time of the previous year.  

‘We increased our efficiency, capacity and productivity with an aim to manage 30 per cent more order this year than that a year ago, but our orders increased by 15 per cent only,’ explained Khaled.

The overall situation, however, would not be negative but it would be less than normal growth that manufacturers predicted, he pointed out.