Impacted by the global economic situation Bangladesh, which has been seeing double digit growth for a number of years in its export of garments to both the major markets of the US and EU, witnessed a slowdown in the running financial year. Encouragingly, the growth is still positive, though the pace is much slower. In October, exports of readymade garments were US $ 1.63 billion, compared with US $ 1.5 billion in the same month of 2011. For the four months of the FY ended in October, garment exports totalled US $ 6.63 billion, 5 per cent more than a year earlier.
Sensing the pulse of the global industry, exporters said growth in garment sales in the current fiscal year would likely be less than 10 per cent compared to last year’s figures. Even in the last financial that ended June 30, garment exports rose only 6.6 per cent to US $ 19 billion, short of the Government’s target as garment demand from key Western markets waned.
The industry is still optimistic as there has been a dramatic shift in global garment orders from China to low-cost Bangladesh, where garment factories employ around 4 million workers, mostly women. Today, buyers are looking at Bangladesh as a viable option to China and it has also helped the country that individual players are investing in capacities and upgradation to remain preferred suppliers. It is also a positive sign that many exporters are working up the value chain giving wider product offerings.
Analyzing performance of Bangladesh exporters on a calendar year basis, some key indicators for 2012 are:
Europe in the grip of recession…
■ On the back of Euro Zone crises, apparel imports by the EU in the first seven months of 2012 saw quantities fall by (-) 11.48%, while values also declined by (-) 4.48%. The average UVR of imports, in the meanwhile, increased from Euro 16.10 (per kg of fabric equivalent) in the same period last year to Euro 17.37 (per kg of fabric equivalent) this year. Though Bangladesh enjoys GSP advantage to Europe, the gains are very marginal with 10.51% increase in value, mostly due to increasing UVR, while volumes were up just 1.40% in the period under review. Significantly, the average UVRs, which the country is receiving is also higher at Euro 12.47 (per kg of fabric equivalent), up from Euro 11.44 (per kg of fabric equivalent) last year.
Bangladesh registers decline in US
■ The US in the first eight months of 2012 saw decline in both value and volume of imports of (-) 1.34% and (-) 3.15% respectively, indicating that the market conditions are still depressed despite a slow recovery. As most other manufacturing destinations Bangladesh too registered a downfall in exports to the US both in volumes and values during the review period of (-) 4.88% and (-) 1.83%, respectively. The average UVR of Bangladeshi exports to the US was US $ 2.94, up from US $ 2.85 in the same period last year.
Japan an increasingly important market for Bangladesh
■ The first eight months of the year saw garment imports by Japan increase in value by 2.56%, though volumes were down by (-) 3.37%. Knitted garments registered a decrease of (-) 4.92% in volumes, while the volume of woven garments increased 1.38%. The values were up in woven garments by 3.93%, while those of knitted garments were up by 1.11%. With its low-cost offering, Bangladesh is taking major strides with a whopping 52.36% increase in value of exports and 47.74% increase in volumes. The gains are from both the knitted and woven categories, which registered value increase of 47.04% and 56.30%, respectively.
Exports to Canada witness decline
■ The trend of declining imports continued and in the first eight months of the year, Canada saw value of imports fall by (-) 2.89%; while knitted garments registered a decline of (-) 4.54%, the import of woven garments decreased by (-) 1.26%. Even Bangladesh suffered, registering a decline in its exports to Canada in the first eight months of this year. The country registered decrease of (-) 1.95% in value of exports. While the knitted garments were down (-) 8.00%, the woven categories, registered increase of 3.60%.
