In the first five months of 2024, Bangladesh's apparel exports to the United States, its largest market, declined by 12.31 per cent in value to $2.90 billion.
According to data from the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce, in terms of volume Bangladesh shipped 6.22 percent fewer garments, equating to 956.55 million sqm, down from 1.01 billion sq m in the corresponding period the previous year.
In contrast, Bangladesh's key competitors, China and Vietnam, outperformed it in the US market. US apparel imports from Vietnam reached $5.41 billion in January-May 2024, showing a smaller year-over-year decrease of 1.48 percent. China's apparel exports to the US also declined by 5.81 percent, amounting to $5.43 billion. Overall, US apparel imports dropped by 6.0 percent, from $31.51 billion to $29.62 billion in the first five months of 2024.
Exporters attribute Bangladesh's declining export share to several domestic issues, including long lead times, inconsistent energy supplies, and high production costs. These factors have given Vietnam an edge in the US market, they argue. Mohammad Hatem, Executive President, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), notes, buyers are now placing orders with shorter lead times, favoring countries like China and Vietnam with more reliable energy supplies and quicker turnaround times.
The current gas crisis in Bangladesh hampers factories' ability to operate at full capacity, making it challenging to meet production deadlines. Additionally, the lack of a deep-sea port causes delays in import and export activities. Rising gas prices and recent wage hikes are also eroding Bangladesh's production cost competitiveness. Hatem points out, in many cases, they are forced to decline orders because the offered prices are below production costs. Furthermore, he mentioned difficulties with non-cooperative banks.
Bangladesh is also losing out to Vietnam in capturing redirected orders from China. Vietnam benefits from several advantages, including shorter lead times, lower tariffs for the US market, strong connectivity with China, and substantial Chinese investments in Vietnamese manufacturing.
OTEXA data shows, during the same period, US apparel imports from Cambodia increased by 7.75 percent to $1.28 billion. In contrast, India's apparel exports to the US declined by 2.06 percent to $2.08 billion, and Indonesia saw a 10.49 percent drop to $1.64 billion.
