Disrupted Global Supply Chain Amid Corona

Woven exports fall, knitwear sector rebounds

Sohel Hossain Patwary

8th January, 2021 09:40:26 printer

Woven exports fall, knitwear sector rebounds

The woven sector, which makes up more than 50 per cent of RMG exports, has continued to remain in the negative trajectory due to a fall in export orders from major markets like US and EU amid the corona pandemic.

Though the knitwear sector has been maintaining its strength in the first half of the current fiscal, the woven sector continues to stay weak.

The RMG sector, which contributes around 86 per cent to the country’s total exports income, is comprised of two sectors including ‘knitwear’ and ‘woven’ sector.

In December, woven garment exports posted the lowest performance since June 2020 with an 18.07 per cent fall in export. However, knitwear exports managed to have a relatively stable position in December, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data.

 “This is one of the most tragic turns in our industry. In the absence of proper restructuring or even an exit policy, shrouded by western bankruptcies, hounded by buyers’ unforgiving contracts and force majeure clauses, factories are facing turbulent times,” said BGMEA president Dr Rubana Huq.

In 2019-20 fiscal, RMG sector fetched $27.94 billion from exports, riding on the woven’s sector $14.04 billion and knitwear’s $13.90 billion. In FY 2018-19, the apparel sector bagged $34.14 billion--- $17.24 billion from woven and $16.88 billion from knitwear sector.

Sector insiders said though the woven sector was the best performing sector, it started slowing down since the beginning of corona pandemic that hit hard the global supply chain.

They have attributed the slump to the collapse of the European apparel markets, the largest importer of Bangladeshi apparel goods.

Former BGMEA president Siddiqur Rahman said the woven sector is the biggest strength of Bangladesh’s export basket but this sub-sector has not done well in the last three quarters.

“Competition is rising fast while the pandemic made the path more challenging,” he said, adding that woven products makers should put their focus on their major markets.

According to Export Promotion Bureau (EPB) data, the woven sector in the first half (July-December) of 2020-21 fiscal earned $7.01 billion, a 10.22 per cent fall from the same period of last fiscal.

In the first quarter, export from the woven sector also fell by 5.78 per cent to $3.66 billion.

 “Knitwear sector has been rebounding from corona impact while the woven sector will take years to recover from the fallout,” said Fazlee Shamim Ehsan, director of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

Shamim Ehsan, who is also the owner of Fatullah Apparels, said export orders from major markets like European Union countries, the United States was a little lower due to the corona impact while the value of products also came down.

Sector leaders also said the pandemic situation coupled with the longer lead time is pushing back the best performing woven sector. While competitive countries like Cambodia, Vietnam and Myanmar are reducing lead time, Bangladesh’s lead time still remains longer.