Investment in RMG sector increases

But exports decreased

Staff Correspondent : The global economy came to a standstill during the outbreak of the global pandemic coronavirus. Many famous companies were closed. Many workers were laid off. Which is reflected in the clothing sector of the country. Export orders are temporarily suspended. After the outbreak of corona reduced a little, the clothing sector turned around. However, the economy stalled again due to the Russia-Ukraine war. Fuel and gas-electricity prices increase. The garment sector, which accounts for 84 percent of the country’s export earnings, is under internal and international crisis. A multifaceted crisis emerges.
But investment comes in the country even in a hostile environment. The factory was built. More than six hundred new factories have been built in the last two years. Although the new wages are effective, several factories have also closed due to reduced purchase orders. Concerns are growing as exports to key markets in the ready-made garment sector have declined.
The United States is the single largest market for country-made garments. In the last 11 months, exports have decreased by 25 percent in this market, which accounts for about 22 percent of the total export earnings. Exports to the European market have also declined. If this situation continues, there will be a crisis in exports – this is what the entrepreneurs are saying. Although they are looking at something political with it.
According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), 264 new factories will be invested in 2023. In 2022, this number was 330. The data says that in the last two years, new investment has come in 594 factories in the country. According to Export Promotion Bureau (EPB) data, last year’s apparel exports were worth 4,739 million dollars. That is $4,571 million in 2022. According to that, in 2023 compared to 2022, $168 million more clothes were exported.
Several factories have been closed recently. Businessmen say that many small factories are not able to survive as the cost is higher than the production. Forced to close the factory. Due to dollar crisis, LCs cannot be opened, banks are also unable to settle LCs. Many are relocating small factories to build large-scale factories.
Garment Industry Owners’ Association BGMEA President Farooq Hasan said that due to high inflation, many buyers have reduced the purchase of clothes. Due to this the world market is in a bad condition. This situation may not last long. Exports are decreasing in all countries including Bangladesh. Investments are increasing due to the creation of green factories, modern technology and new markets for clothing in the country.
However, even among these, declining exports in some major markets have emerged as a cause for concern. Exports of garments to the United States, the country’s single largest market for manufactured garments, have declined significantly. Exports to Italy fell by 3.89 percent. In the first 6 months of the current fiscal year, 27 countries in Europe have decreased by 1.24 percent compared to the last fiscal year.
According to the data, about 20 to 22 percent of the total export earnings come from the US market. From January to November 2023 (11 months), Bangladesh exported $6.79 billion worth of garments to the United States, which was $9.04 billion in January-November 2022. Accordingly, in the 11 months, the export of garments in the country has decreased by 25 percent compared to the same period of the previous year.
Apparel exports to the European Union (EU) reached $ 11.36 billion during July-December of the current (2023-24) financial year, a decrease of 1.24 percent compared to the same period of the 2022-23 financial year. Exports to Germany, the EU’s largest export market, fell by 17.05 percent to $2.86 billion in July-December 2022-23. Apparel exports to Canada reached $741.94 million in the first six months of the 2023-24 fiscal year. The country’s growth has decreased by 4.16 percent compared to a year ago.
Farooq Hasan said that the United States has taken various steps to control inflation. Many countries, including the US central bank, the Federal Reserve, have raised policy interest rates. The crisis has been created due to inflationary pressure. But this situation will pass soon. When everything returns to normal, the global clothing market will recover.
Unconventional market or new market is giving good news among these. Our garment exports to non-traditional markets are steadily increasing. Apparel exports to non-traditional markets increased by 12.28 percent to $ 4.53 billion in July-December of FY 2023-24, as against $4.04 billion in the same period of FY 2022-23.
In this regard, Additional Managing Director of Denim Expert Limited Mohiuddin Rubel said that many countries are now struggling to control high inflation. Exports to many major markets have declined. Exports to new markets or non-traditional markets are increasing. This is a positive aspect for the country’s readymade garment sector.
He said that in the six months of the fiscal year, exports to Japan, Australia and South Korea among the main non-traditional markets of the country’s garment exports increased by 9.98 percent, 24.67 percent and 19.06 percent respectively. However, our garment exports to India have declined by 17.27 percent.