Industry Desk: Despite the record-high inflation in the USA and the EU – two major apparel export market for Bangladesh readymade garments (RMG) – Bangladesh RMG unit prices against exports have observed a noteworthy growth in the USA and the EU markets during July to May of FY 2022-23.
Both the market has been playing a paramount role in Bangladesh’s apparel export, as the EU holds 50% and the US holds a 21% growth share during the July-May period of the current fiscal year.
Although, both the USA and the EU along with most of the other nations are witnessing a hike in commodities due to the Russia-Ukraine conflict. In the USA market, in April alone, the consumer price index (CPI) had ticked to 8.3% year-over-year. While, according to Eurostat, the statistical office of the European Union, EU area annual inflation was 8.1% in May 2022.
In spite of this scenario, Bangladesh’s apparel unit price increased significantly by 6.5% in the USA and 10.7% in the EU market which is a great boost for the Bangladesh RMG.
The United States International Trade Commission (USITC) data also showed that the average garment unit price rose by 6.5% to $3.3 for the US market during the July-May period of FY 2022-23.
In the EU, brands have bought per kg of garment for €14 with 10.7% growth, the Eurostar data showed.
The positive scenario also prevailed in terms of volume growth in the USA and the EU.
As per the data of USITC and EuroStat, Bangladesh’s garment export volumes have also witnessed a significant rise in the two major markets helping achieve an excellent growth rate.
Bangladesh RMG export volume to the US market grew by 36.5% to $1.89 billion in garment items in the period. Which was 1.38 billion pieces during the same period of the FY21 as per the USTC data.
Among the RMG export in the US – Knitwear product volume grew by 40.2% and woven garments increased by 31.2%.
During the July-May of FY 2022-23 period, local RMG exporters received on average $2.1 per unit of knitwear garment in the US market. While woven products got on average $5.2.
In the EU market, knitwear clothes prices grew by 13.2% to €13.4 per kg. And woven products’ price grew by 7.1% to €15.4 per kg in the July-March of FY22.
Bangladesh has stood out as a preferred sourcing hub in spite of the macroeconomic instabilities in the western countries. It is perfectly clear that Bangladesh still stays competitive in some parameters and is preferred by most of the buying countries.
In recent times, the country’s neighboring apparel sourcing hubs like China, Vietnam and India have fallen behind due to numerous difficulties. And Bangladesh is getting more work orders as the country’s textile and apparel making industry pouring more investment, opening direct shipping routes to western ports have given it the required edge the global buyers.
Faruqe Hassan, BGMEA President said, “We are already feeling the pressure of inflation. Some buyers have started to defer purchase orders because in such a situation people will spend mainly for food, and buy clothes a little less.” He said the Russia-Ukraine war has led to price hikes of general commodities like food and fuel. The western countries were anticipating a recession.
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