Bangladesh's apparel exports to the European Union (EU) declined by 4.98 per cent to €8.72 billion in H1, 2024 as againstexports worth €9.18 billion in the same period of 2023, according to data released by Eurostat, the statistical office of the EU.
Exporters attribute this downturn to global challenges affecting all major exporting nations, including Bangladesh. However, they note, Bangladesh has been particularly hard-hit due to the erosion of its competitive advantages, driven by rising utility costs, an unreliable gas supply, and a recent wage hike.
Bangladesh’s knitwear exports to the EU fell by 8.58 per centduring the Jan-June’24 period while its shipments of woven garments increased marginally by 0.28 per cent to €3.74 billion.
FazlulHoque, Former President, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), avers,global challenges are impacting all major apparel-exporting countries.Bangladesh has been affected more severelydue to the erosion of its competitive edge, primarily because of high utility prices, gas shortages, and wage increases.
Instead of making abrupt announcements about shifting or canceling orders, buyers have been gradually redirecting orders to other countries to mitigate business risks, Fazlulpoints out.However, despite these challenges, exports may recover in the coming months if the political situation in the country stabilises, he opines.
EU's total apparel imports from various countries declined by 6.03 per cent to €38.47 billion during Jan-June ‘24 as against €40.94 billion recorded during the same period in 2023. The 4.98 per cent decline in Bangladesh’s apparel exports was slightly better than the global average decline in the EU’s apparel imports.
According to Eurostat, Bangladesh secured the top position for knitwear exports to the 27-nation bloc during January-June 2024. Bangladesh's knitwear exports to the EU reached €4.98 billion, surpassing exports worth €4.51 billion by China.
In terms of woven garments, Bangladesh's exports to the EU totaled €3.74 billion during the H1, 2024, compared to China’s €4.65 billion.
Mohammad Hatem, Executive President, BKMEA, notes, long lead times have been a significant factor causing Bangladesh to fall behind its competitors. Ongoing power and gas crises have hindered manufacturers from operating at full production capacity and have created difficulties in procuring raw materials on time, he explains.
