Bangladesh’s apparel export, which was on a glorious run not so long ago, seems to have run into rough weather of late after its apparel export in July, the first month of Financial Year 2022-23, witnessed a significant month-on-month (M-o-M) decline of 17.71 per cent.
Bangladesh exported garments worth US $ 4,092 million in June 2022, which in July fell to US $ 3,366.91 million, consequent to rising inflation in its major apparel export destinations, thanks to the ongoing Russia-Ukraine conflict, compounded further by increasing raw material prices in the global market.
It may be mentioned here US economy entered into a technical recession recently after growth tumbled 0.9 per cent in the second quarter, while the annual inflation in the euro zone’s 19 countries rose to 8.9 per cent in July, at an increase from 8.6 per cent in June.
Europe and USA are Bangladesh’s major export strongholds.
“People in the West are giving priority to food and mortgages following increase in interest rates. Demand for clothing has dwindled and this will hamper our export,” expressed fears BGMEA President Faruque Hassan.
A detailed analysis of the apparel export figures from March to July 2022 by Team Apparel Resources, points towards a somewhat erratic trend.
On a M-o-M comparison, apparel exports made a minor increase of 0.07 per cent in April over March (in March, Bangladesh exported apparel worth US $ 3,931.40 million, which increased to a mere US $ 3,934.18 million in April) to register 19.72 per cent M-o-M decline in May before making a significant M-o-M gain of 29.55 per cent in June only to falter again July.
As per inputs shared by the industry players, apparel export increase in June was primarily due to increased shipments by the garment makers in May on account of the ensuing long Eid holidays.
“Keeping aside June, the overall apparel exports in the last six months or so point towards a worrying trend, which is reflection of existing global economic scenario, especially in the West,” claimed a garment maker speaking to Apparel Resources.
Given the decrease in fresh work orders, which continues still – as per reports, Bangladesh apparel sector witnessed export orders fall 20 per cent in Apr-June – the industry is not very hopeful of a strong turnaround anytime soon.
