The import of apparel items from Bangladesh by European Union (EU) countries declined by 4.98% in value to 8.72 bn euros in January-July (H1) 2024, which was 9.18 bn euros in the mentioned period of 2023, according to the recent data of the Eurostat, the statistical office of the EU. Most of the major apparel suppliers to the EU faced negative growth due to lower demand caused by high inflation and global economic turmoil.
Moreover, exporters said that Bangladesh has been severely hit because of the erosion of its competitive advantages due to high utility costs, disruptions in gas and energy supplies, and a recent wage hike. The Eurostat data stated that the RMG imports by the EU from different countries in H1 of 2024 fell by 6.03% to 38.47 bn euros, which was 40.94 bn euros in the same period of 2023. The data also shows an overall reduction of 4.98% in Bangladesh’s apparel exports was slightly better than the global average decline of 6.03% in the EU’s apparel imports.
According to exporters, global inflation and rising interest rates reduced consumer demand, which led to a stockpile of products in retail outlets of EU buyers and prevented them from placing newer orders. Among the major competitors of Bangladesh, the data showed that apparel imports by the EU from China in January-June of 2024 declined by 7.23% to 9.16 bn euros, which was 9.88 bn euros in H1 of 2023.
However, China remained as the top apparel exporter to the EU in terms of value but Bangladesh’s position remained unchanged as the highest RMG exporter in the market in H1 of 2024 in terms of volume.
Apparel imports by the EU from Turkey in H1 of 2024 also witnessed a negative growth of 10.95% to 4.59 bn euros, which were 5.15 bn euros in the same period of 2023. India’s RMG exports to the EU in January-July of 2024 fell by 4.53% to 2.32 bn euros compared with those of 2.43 bn euros in H1 of 2023, the EU data stated. Fetching a negative growth of 6.16%, Vietnam exported apparel items worth 1.7 bn euros in H1 of 2024, lower from 1.81 bn euros in the mentioned period of 2023.
Bangladesh’s knitwear exports to the EU in the first half of 2024 stood at 4.98 bn euros while those of China were 4.51 bn euros. Bangladesh’s woven garment exports to the EU in January-June of 2024 stood at 3.74 bn euros against China’s exports of 4.65 bn euros in the period.
Mohammad Hatem, President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that one of the main reasons Bangladesh is lagging behind is because of the lead time.
He also said that factories have been unable to utilize their entire production capacity due to the continuous power and gas problems and they have also had difficulties in obtaining raw materials on time, which has resulted in delays of an extra 20 to 25 days in the production and shipment of the goods.
Bangladesh had seen negative growth in the US and UK markets in addition to the EU market, he went on saying that although figures from the Export Promotion Bureau may have indicated development, actual results were quite different. The exporters also said that they hope that the exports would recover in the coming months if the political situation stabilizes.
Fetching a negative growth of 20.65%, Bangladesh earned 17.38 billion euros from the EU countries, the EU, the largest export destination of Bangladesh for its apparel items, which was 21.91 billion euros in 2022.
