BD still 2nd largest exporter of RMG
Industry Desk: With apparel export earnings of $15.91 billion, Bangladesh reclaimed its second position as RMG products exporters from Vietnam during the January-June period of 2021.
In 2020, Bangladesh lost its second position in terms of clothing export in the global markets to Vietnam as per the data of World Trade Statistical Review 2021.
Bangladesh exported clothing goods worth $ 28 billion in 2020 while its global market share stood at 6.3 percent. In the same period, Vietnam’s exports stood at $ 29 billion accounting for a 6.4 percent market share. However, during the first half of the current year, Bangladesh apparel exports surpassed Vietnam.
AS per the Export Promotion Bureau (EPB) data Bangladesh earned $15.91 billion during the January-June period of 2021. On the other hand, according to the General Statistics Office of Vietnam data, Vietnam earned $15.31 billion in the same period. It means Bangladesh earned about $600 million more than Vietnam.
Why Bangladesh lost second passion
In 2020, the manufacturing of apparel goods was suspended due to the government-enforced lockdown to stop the spread of the Covid-19 pandemic.
Factories were closed for over one month due to the pandemic, while the shipment also hit hard, which caused a downward trend in exports.
“Vietnam government managed the Covid-19 pandemic in a better way than us and they were able to continue production amid the pandemic. While our production was disrupted,” Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) first vice president told.
“That is why exports saw a decline in the year and taking the advantage Vietnam gain.”
But we turned around later and hopefully, it will continue, he adds.
How Bangladesh reclaims the second position
Bangladesh’s capacity to take bulk work orders and commitment to ensure on-time delivery helped to regain its second position, while government financial and policy support expedited the recovery.
“Even by incurring losses, we take work orders and deliver them timely. On the other hand, we have more capacity to execute large-scale orders, which helped to retain buyers here and bagged more work orders,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) vice president Shahidullah Azim told.
On the other hand, the government stimulus package to pay workers wages and other policy support also helped to regain the momentum, said Azim.
Will the growth sustain?
Exporters are very optimistic about retaining the second position as the present work orders flow is enough to run the factories. While buyers’ confidence grew in Bangladesh due to its commitment and quality products.
AS per the EPB data Bangladesh earned $15.91 billion during the January-June period of 2021. On the other hand, according to the General Statistics Office of Vietnam data, Vietnam earned $15.31 billion in the same period. It means Bangladesh earned about $600 million more than Vietnam.
In addition, the global data showed recovery with the massive vaccination in export destinations especially in the US and Europe, said Salam, also president of Exporters Association of Bangladesh (EAB).
“Last year, we suffered due to factory closure caused by the Covid-19 pandemic but we were able to retain the buyers’ confidence taking orders even at lower prices and delivered timely,” BGMEA president Faruque Hassan told.
“As the buyers are happy with our performance, there will be no challenge in retaining the growth and to remain the second-largest exporter of apparel goods in the globe, said Hassan.
But we need further supports including cash incentives against non-cotton products and continuation of existing facilities, said Hassan also managing director of Giant Group.
“Our focus will be on product diversification, research and innovation. As a part of them, we are going to launch an innovation center,” said the business leader
However, economists stressed product diversification and moving towards value-added products and improving workers’ efficiency.
“A come back in the first half of the current year is a good sign but needs extra care to retain it. For this, Bangladesh has to devise a long-term plan to diversify products and move to produce value-added products,” Ahsan H Mansur, executive director of Policy Research Institute (PRI) told.
He also suggested the government take a step so that Bangladesh can enjoy duty-free benefits from European Union after the LDC graduation as erosion of duty benefits will leave us in tough competition.
Furthermore, the manufacturers will have to ensure a safe workplace and uphold the present status of health safety so that the buyers continue to place fresh work orders.
“It is high time for manufacturers to improve workers’ efficiency and be ready for catering online supply to retain price competitiveness in the global exports market, Khondaker Golam Moazzem, research director at Centre for Policy Dialogue (CPD) told.
He also suggested manufacturing non-cotton products as the demands for those goods are on the rise. To tap the opportunity the government has to come up with fiscal support so that the exporters can be competitive in the global market to its competitors.
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