Exports of apparel made in the United States, the country’s single largest export market, fell. Exports to the country fell in the first quarter (January-March) of this year as US retailers and brands reduced apparel imports.
The exporters of the related sectors say that due to gas-electricity crisis and lack of deep sea ports, they are not able to supply the goods in time as per the demand of the buyers. Apart from this, the sector has been affected due to the Red Sea crisis. Buyer countries are importing from other sources as they are unable to deliver goods on time. Due to this, the country’s garment exports to the US market have decreased in recent times.
According to the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce, the US market decreased by about 18 percent from January to March this year to $1.75 billion. Again, from January to February, garment exports to the United States decreased by 19.24 percent to 1.18 billion dollars. On the other hand, from last January to March, the combined export of textiles and ready-made garments decreased by 17.37 percent to 181 million dollars.
Executive President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem said that exports have decreased in both EU and US markets. The number one reason for this is that our lead times are longer. The buyers are doing the purchase orders with short lead time. And our traders are not able to send the goods during this period. Again, the cost of everything here has increased. Because the price of electricity has increased, the price of gas has increased. Then the interest rate increased again. Due to these reasons, we are not able to provide the products at the price demanded by the customers.
Mohammad Hatim also said that the first reason for the long lead time is that we do not have a deep sea port. As a result, it takes a bit more time for us to go to the mother vessel from the feeder vessel here. Along with this, our customs harassment violence has reached such a level that the customs are detaining the goods in various ways. A shipment is held up for 10 to 12 days due to customs harassment. How will the country’s exports increase? There is no gas, resulting in disruption of production. There is no electricity. He said, if we want to increase the export, we have to reach the product to the buyer on time. That is to reduce the lead time. There is no alternative.
Director of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Ashikur Rahman Tuhin told Khabar Kagazin in this regard that the decrease in exports in the first few months of this year is temporary and normal. Tuhin also said that the reason for this is that the amount of exports before Ramadan Eid was very high. Because we have sent many orders before Eid. As there is a surplus, buyers are reducing imports. Again, there is another word here, ‘shifting of the season’. That is, after buying the product on the occasion of a special occasion or festival, the demand for clothes is less for some time. Due to these reasons, exports may have decreased.
Director of BGMEA Shobhan Islam said, our garment exports to America have decreased slightly. But we will improve further in the future. If you look at the March-April data, you will understand that we are slowly recovering. Shobhan Islam thinks that the red sea is behind the decline in exports. Due to the Red Sea crisis, some orders have gone to other countries. In addition, exports to the US have decreased due to our lead time and product category.
Denim is our main export product to Europe and America. Demand for denim was slightly lower in the last quarter. Because the stocks of the traders there are more than the demand, they give less purchase orders. Due to this, the export decreased slightly in the last quarter. Bangladesh’s largest market for garment exports is Europe. However, the United States is the largest exporter of clothing as a single country.
According to BGMEA data, the US currently contributes about 18 percent to the country’s total apparel exports. The UK and Canada are the next largest single country export markets. These two countries contribute 10 and 3 percent to the total garment exports respectively. Exports to the EU, UK and Canada increased last year but fell to the US. Exports to the market declined by 5.51 percent in FY 2022-23.
According to Otexa statistics, in 2022, US merchants imported a total of $9.988 billion in ready-made garments. In contrast, in 2023, the United States imported 7,784 million dollars worth of ready-made clothing from different countries around the world. As a result, the country’s total exports decreased by about 25 percent.
Last year’s overall apparel exports declined compared to the previous year. According to Otexa data, US traders imported $9.72 billion worth of apparel from Bangladesh in 2022. In 2023, the import volume decreased by 28 percent to 729 crores. In 2022, US traders’ combined imports of textiles and ready-made garments from Bangladesh were $1,200 million. In 2023, it will decrease to 7.29 billion dollars.
In 2023, exports from the top five countries exporting apparel to the U.S. market declined at about the same rate. However, although Vietnam’s business has increased since this year, the exports of the remaining four countries in the top five – China, Bangladesh, India and Indonesia – have decreased.
While inflationary pressures in the United States have eased gradually, apparel exports have been falling for the past few months as the country’s retailers and brands cut back on apparel imports, businessmen said. Also, the production of several garment factories in Bangladesh was disrupted due to the wage hike movement from September to December last year. Apart from this, in recent times, the widespread shortage of gas and electricity in factories has severely damaged garment exports.