Bangladesh Garment Exports Lag Behind Asian Competitors
Apparel exports from Bangladesh have witnessed a drop in both value and volume to the EU and the US in the first two months of 2024.
While, China and Vietnam both reported single-digit growth in terms of value and volume of garment exports to the US, Bangladesh has recorded double-digit negative growth rate in this market.
In clothing exports to the EU, all three countries reported negative growth, but Bangladesh’s negative growth is markedly higher than its two closest competitors.
QIMA, a quality-control company, in its latest report revealed that following a slowdown in 2023, demand for global textile and garment were up 20 percent year on year in the first quarter of 2024.
However, Bangladeshi apparel manufacturers are struggling with various cost escalations that have hampered its ability to take advantage of the recent rebound in global apparel demand.
“These cost hikes include a new wage board structure for workers in the industry and increase in energy costs,” Financial Express reported.
Not equally but still quite important is the nagging issue of logistics whereby shipment delays have been costing the sector heavily in meeting deadlines.
A recent decision of the Bangladesh government to withdraw incentives to the clothing industry too is not helping matters. But incentives were bound to go anyway sometime.
Experts believe that the explosive growth in industrial production capacity in this sector had happened without proper demand forecasting.
Many companies have grown exponentially employing tens of thousands of workers mainly due to availability of easy credit and perceived notions of continued demand.
The belief that the government would forever go on providing subsidies or delay the inevitable introduction of a living wage that would potentially hamper the business model was misplaced.
