Defying the worldwide inflationary pressure, Bangladesh has registered a significant growth in its apparel exports to the European Union (EU), United Kingdom (UK) and Canada. The scenario is in contrast for the United States (US) as exports to the largest destination of Bangladeshi garments tumbled down by 5.07 per cent in the first 11 months of the outgoing fiscal year 2022-23, according to the Export Promotion Bureau.

The US procured apparel products worth USD 7.73 billion from Bangladesh in the first 11 months of FY23, when the exports were USD 8.15 billion in the previous year’s corresponding period.

Some 81 per cent of the total apparel exports from Bangladesh go to these four markets. The EPB data shows that apparel products worth USD 33.54 billion were exported to US, UK, EU and Canadian markets in the last 11 months, out of the total apparel exports of USD 42.63 billion from Bangladesh.

The EU continues to be a significant market for Bangladeshi garments, accounting for approximately 50 per cent of the country’s total garment exports.

During the first 11 months of the current fiscal, Bangladesh exported ready-made garments worth USD 21.22 billion to the EU, reflecting a growth of 9.94 per cent compared to the same period last year. The total exports to the EU amounted to USD 21.4 billion in the previous fiscal.

Bangladesh experienced a 7 per cent decline in garment exports to Germany, the largest market within the EU, in the last 11 months. The country purchased apparel products worth USD 6.04 billion from Bangladesh during the period.

However, exports to Spain and France, the second and third top markets within the EU, increased by 18 per cent and 23 per cent respectively during the time frame.

UK remains a major market despite Brexit

Even after leaving the EU, the UK remains one of the major markets for Bangladeshi garments. In the first 11 months of the current fiscal, Bangladesh exported ready-made garments worth USD 4.59 billion to the UK, indicating an year-on-year growth of 12.17 per cent. During the same period last year, exports to the UK were valued at USD 4.09 billion.

Impressive growth in Canadian market

Garment exports to Canada also witnessed a significant upturn, increasing by 17.62 per cent year on year. In the first 11 months of the outgoing fiscal, the country exported ready-made garments worth USD 1.39 billion to Canada, compared to USD 1.18 billion during the same period in the previous fiscal year.

Promising growth in new markets

Bangladeshi has shown remarkable success in non-traditional export markets in the outgoing fiscal. During the first 11 months, ready-made garments worth USD 7.69 billion were exported to new markets, a substantial growth of 32.74 per cent compared to the corresponding period of the previous fiscal.

Japan emerged as the largest garment export destination among the new markets, with a value of USD 1.46 billion, indicating a significant rise of 45.80 per cent in just one year. Australia ranked second in terms of non-traditional markets, with ready-made garment exports amounting to USD 1.06 billion. Here, the growth rate is 41.82 per cent.

Aside from those, Bangladesh’s exports to Russia amounted to USD 400 million, India USD 940 million, South Korea 500 million, China 250 million, United Arab Emirates (UAE) 270 million, Mexico USD 310 million, Malaysia USD 280 million, Saudi Arabia 170 million, New Zealand USD 110 million, Chile USD 150 million and Brazil USD 150 million. Of them, exports to Russia and Chile declined by 29 and 12 per cent while it increased in other countries.

Future outlook

Fazlee Shamim Ehsan, vice president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), voiced concerns regarding the current purchase order situation in the industry. He attributed the slump in orders to the high inflation in major garment markets.

He noted that factories are now operating at a reduced capacity of 20-30 per cent due to the low purchase orders. Exports to the EU and the US markets declined from January to April, but the other traditional markets have demonstrated positive growth since last July.

Regarding the future outlook, the BKMEA vice president said the coming months may continue to see the waning trend of purchase order. However, inflation rates in several countries, including the US and the UK, are gradually coming down.