Decline RMG exports to US troubling Bangladesh

Staff Correspondent : In the initial 11 months of the current year, Bangladesh has witnessed a significant drop in its garment exports to the United States, a critical market for ready-made garments. The United States accounts for 18 percent of Bangladesh’s overall garment exports, facing uncertainties and fluctuations in recent months.
Between January and November of the current year, Bangladesh’s exports of ready-made garments to the United States totaled $ 6.79 billion, marking a substantial decrease of 24.91 percent compared to the corresponding period in the previous year. In contrast, during the same timeframe in 2022, Bangladesh exported ready-made garments worth $ 904 million to the United States. This decline, however, is not unique to Bangladesh, as the top five apparel exporting countries have collectively experienced a downturn ranging from 21.5 to approximately 26 percent. US traders reduced imports of ready-made garments by about 22 percent during the first 11 months of the preceding year, negatively impacting major exporting countries.
Exporters from Bangladesh attribute the decline to increasing inflation in the United States since the onset of the Russia-Ukraine war in February 2022. In June of that year, inflation reached 9.1 percent, the highest in 40 years, leading consumers to reduce purchases beyond daily commodities and fuel. As inflation subsided, exporters anticipate an improvement in purchase orders from the country’s brands and buyers by the end of the month.
According to the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce, US businesses imported $ 72.41 billion worth of clothing from January to November last year, reflecting a 22.40 percent decline in US apparel imports during the first 11 months of the outgoing year.
China maintains its position as the top apparel exporter to the US market, with a 25.85 percent decrease in garment exports to $ 15.22 billion. Vietnam, the second top exporter, experienced a 22.68 percent decrease, exporting $13.18 billion worth of clothing. Bangladesh, the third top exporting country, holds a market share of 9.47 percent, with China and Vietnam at 21 and 18 percent, respectively.

OTEXA data reveals that Bangladesh’s garment exports to the US market increased by 2.33 percent over a decade, reaching $ 9.72 billion in 2022. However, tensions between Bangladesh and the US over political issues have been ongoing, impacting garment exports. Despite speculations, Fazlul Haque, former president of BKMEA, attributes the decrease in purchase orders to high inflation and a surplus of unsold goods in warehouses, expecting a potential rebound by the end of January.