Bangladesh’s apparel export has surpassed the $30.76 billion target set by the Export Promotion Bureau (EPB) for the immediate past FY21. In the fiscal 2020-2021, the country exported apparel items amounting to $30.86 billion – which is 10% higher than in the previous year. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) came up with the calculation based on the National Board of Revenue (NBR) data. With the export volume cruising nicely even amid the Covid-19 pandemic, the readymade garment (RMG) manufacturers expect better business performances in the upcoming months. Mass vaccination in the US and Europe – two major destinations of Bangladesh’s apparel exports – has helped western orders get back on track. However, they are worried about hikes in raw materials and freight charges, plus the price drop of RMG items in the international market. Bangladesh also got more export orders that shifted from India, Myanmar and China.
The improvement in the factory environment in the last couple of years is increasing the confidence of the buyers in doing business with Bangladesh. After an eight-year pause, now companies like Walt Disney are coming back to Bangladesh to source apparel items. However, the continuous fall in apparel prices despite the increase in the export is a cause of concern for exporters. Bangladesh also needs to improve its ranking in the ease of doing business ratings to ratain the new buyers coming to Bangladesh.
RMG exports started plummeting drastically since the Covid-19 outbreak in Bangladesh in March last year. The garment sector contributes about 84% to Bangladesh’s overall exports. Against a $38.20 billion target, apparel export in the 2019-20 fiscal year declined to $27.95 billion – that is 18% less than the year. In the immediate past 2020-21 fiscal year, the export grew by 10% to $30.86 billion. As per the BGMEA, the annual growth rate, however, is around 16%. The BGMEA hopes the export volume in the 2021-22 fiscal year might be $33.70 billion and cross the pre-pandemic 2018-19 volume. Bangladesh Knitwear Manufacturer and Exporters Association (BKMEA) is also optimist and hopes that the export growth in the fiscal 2021-22 fiscal might be higher than what it was in the pre-pandemic time. The association is of the opinion that the knitwear export in this year will clock a 15% growth if the virus situation does not deteriorate. The export performances are positive, but still below the pre-pandemic time. It is still at the recovery stage but the apparel exports may further rise in upcoming months. Despite the spiral, it is disappointing compared to the factory owners’ $50 billion target by 2021.
Bangladesh’s cotton-based apparel items still account for over 70% of the export though man-made fibre accounts for more than 70% of the global market. There is a general feeling that even if Bangladesh’s exports increase by making typical garments, the entrepreneurs will not get their desired prices. Exporters feel the need to switch from cotton-based products to man-made fibre. In order to perform better in the international market, they have to go for higher value-added products. The shift to man-made fibre would increase the value addition by 20-25% compared to the current cotton-made fibre items.
Export performance of Bangladesh for FY 2021-22 July-November (Provisional)
