Tuesday, 16 August, 2022

Apparel export orders decline

Export orders for Bangladeshi apparel products have dropped by 10 to 20 percent due to the negative impact of the ongoing Russia-Ukraine war, industry insiders said.

Energy and food prices have shot up across the globe after the start of the war, resulting in low global demand for apparel items among the limited-income people due to more spending on fuel and food, they explained. 

The RMG exporters say the export-oriented apparel sector now facing a very hard time, which may make it difficult for the government to achieve the export target in FY23.

“We’ve been affected more by the Russia-Ukraine war compared to the impacts of Corona pandemic. The demand for clothing has fallen globally while price of primary raw materials has gone up,” Abdus Salam Murshedy, president of Exporters Association of Bangladesh (EAB) said.

“As a result, price of finished goods is shooting up but the buyers want to buy apparels from Bangladesh at the previous prices as many of our neighbouring countries don’t need to import primary materials,” he added.

In these circumstances, the local RMG factories are resorting to production automation to lower their production cost, the former BGMEA president Murshedy also informed. 

Apparel shipment orders from international retailers and brands declined by 20 percent during the September-November quarter compared to that of the March-June period, according to BGMEA.

BGMEA president Faruqe Hassan informed that gas price surged nearly three folds in the USA and the EU.

He said the countries like Bangladesh have been affected severely because of the energy and food price hike, adding that utilisation declaration (UD) for the upcoming spring and summer seasons has also slipped 20 percent.

Although RMG exports won’t fall drastically, it will witness a modest decline. It will make achieving the export target in the current fiscal year more challenging, Murshedy predicted. 

According to him, the export-oriented RMG industry is going to face the toughest time in its history.

BGMEA director Mohiuddin Rubel informed that they are getting a forecast of more fall in export orders. “The RMG export trend is now slowing down from a sign of recovery from corona pandemic.”

Some BGMEA leaders are optimistic that the crisis is temporary and orders will start rising from next September when demand for the next seasons will pour in.

Calling not to be panicked, Bangladesh Garment Buying House Association president Kazi Iftekhar predicted that the order may fall 10-13 percent, which is not alarming compared to the current 6-8 percent inflation rate.

Export Promotion Bureau (EPB) Data showed that readymade garment export in FY22 grew by 35.47 percent to $42.61 billion from $31.45 billion in FY21.

Export earnings from woven garments in the just concluded financial year 2021-22 increased by 33.82 percent to $19.39 billion from $14.49 billion in FY21. Earnings from knitwear export in FY22 grew by 36.88 percent to $23.21 billion from $ 16.96 billion in FY21.

Riding on this export performance, the government has set $67 billion export target for the current fiscal year, which finally stood at $60 billion in FY22, including $52bn in goods exports.