Garment exports to US double in five years

Garment shipment to the USA, the single largest export destination of Bangladesh, almost doubled in the last five years thanks to the tariff war between the United States of America and China and the presence of competitive prices of the locally made apparels.

After having two strong years in 2021 and 2022, apparel export to the USA fell 8.68 percent year-on-year to $8.27 billion in 2023, according to data from the Export Promotion Bureau and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Bangladeshi manufacturers sent $5.84 billion worth of garments to the USA in 2018 and over $9 billion in 2022, but it fell the next year, caused solely by a dip in woven garment shipment.

However, knitwear export saw a marginal jump in 2023 compared to the previous year.

Readymade garment export to the European Union (EU) slowed to a great extent last year, posting a meagre year-on-year growth of 1.49 percent down from 2022's 28.49 percent.

Apparel export to the EU was $23.38 billion in 2023 from $23 billion the previous year.

"It is noteworthy that export to our largest destination in EU and the second largest destination in terms of world, Germany, saw a significant decline which contributed to such a setback in our export growth to EU," the BGMEA said.

Bangladesh shipped $6.1 billion worth of garments to Germany in 2023, down from $7.29 billion in 2022.

Among other EU countries, Lithuania, Malta, Slovakia and Slovenia also experienced a negative year-on-year growth.

Conversely, the positive performance was maintained in a few EU markets, particularly in Denmark, France, Italy, Spain and the Netherlands where it rose by 16.21 percent, 8.46 percent, 10.52 percent, 12.69 percent and 13.27 percent respectively.

"With the growth in these countries, our export to overall EU region was able to maintain a status-quo in growth in 2023," the BGMEA said.

Meanwhile, UK, the third largest export destination for Bangladesh, managed to retain a year-on-year growth of 12.46 percent in 2023 by shipping $5.34 billion RMG last year compared to $4.75 billion the previous year.

Additionally, Bangladesh's export to non-traditional markets demonstrated encouraging growth, increasing remarkably by 20.54 percent to $8.87 billion in 2023.

Currently, the clothing export share to the non-traditional markets stands at 18.72 percent, from 16.52 percent in 2018.

Notably, Japan is Bangladesh's top destination among major non-traditional markets, fetching $1.68 billion in the mentioned period, posting a 26.53 percent year-on-year growth.

Exports to other non-traditional markets, including Australia, Russia, New Zealand, Saudi Arabia, South Korea and China, also posted positive growths.

In 2023, Bangladesh's RMG export to the world increased 3.67 percent year-on-year to $47.39 billion.

The six years' data compiled by the BGMEA shows that Bangladesh shipped $32.93 billion garments in 2018, posting a 12.71 percent growth.

Such a growth reflects post-Covid surge in demand for clothing and most importantly rise in unit price due to increase of freight and raw materials costs, including cotton, yarn, chemicals and dyes, said BGMEA President Faruque Hassan.

"The year 2023 has been a tough one since its beginning as the growth curve kept faltering over the months, and in the end of the year we were finally able to retain 3.67 percent year-on-year growth having an export turnover of $47.39 billion."

It is crucial to acknowledge the concerning global import reduction throughout 2023, which is evident through the monthly import performance by Bangladesh's major markets, particularly EU and USA, he said.

"This phenomenon, caused by a confluence of factors including supply chain disruptions, geopolitical tensions, and the ongoing pandemic, affected not just us but major clothing exporters like China, Turkey, Vietnam, and India."