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Sweater exports see robust growth in July-January of FY19

  • Published at 10:30 pm February 20th, 2019
sweater
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Bangladesh exported sweaters worth $2.93 billion in the first seven months of FY2018-19

Bangladesh’s export earnings from sweaters, a sub sector of the apparel industry, has seen a sharp rise by 18.57% in the first seven months of the current fiscal year (FY2018-19), due to improvement in production quality and introduction of upgraded technology.

From July–January FY2018-19, Bangladesh exported sweaters worth $2.93 billion, up from $2.47 billion in the same period a year ago, according to Export Promotion Bureau (EPB) data.

In the previous fiscal year (FY2017-18), Bangladesh earned $3.67 billion from sweater exports, posting a growth of 9.32%.

Industry insiders and trade analysts attributed the double digit growth to technological advancements, the US-China trade war, and improvement in product quality.

Furthermore, shipments in November–January also picked up, contributing to an additional rise in export earnings.

Speaking to the Dhaka Tribune, Md Mesbha Uddin Ali, managing director of Wega Fashion Sweater Ltd, said: “Bangladesh offers quality products at comparatively reasonable prices. Manufacturers have also introduced new technology to improve the quality of goods, so production capacity and the standard of goods have also increased.”

Mesbha, also a director of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), added that since Bangladesh has the capacity to execute bulk work orders, "buyers are placing more orders here," registering a sharp growth.

Relocation of businesses from China as a fallout of the US-China trade war also played a major role in increasing export earnings.

Exporters Association of Bangladesh (EAB) President Abdus Salam Murshedy explained that as a spillover effect of the trade war, companies have shifted their sourcing from China to Bangladesh.

"China is moving towards higher-end goods and tech-based production and leaving low-cost products—which is another positive advantage for Bangladesh in attracting more buyers," added Salam, who is also a former BGMEA president.

However, some manufacturers said the growth is solely due to the rise of shipments during winter and that it will not sustain till the end of the year.

Mizanur Rahman Chowdhury, managing director of Mim Sweaters Ltd, said that despite the growth, the apparel sector has some serious challenges ahead as manufacturers have to implement the new wage structure, although buyers are unwilling to pay more.

"Additionally, Bangladesh is losing its competitive edge to the global market due to appreciation of the Taka against the US dollar, while its competitors are devaluing their local currencies," said Mizanur, also a BGMEA director.

In order to retain a competitive edge in the international market, experts suggest increasing productivity and providing more value to customers.

Former adviser to the caretaker government, AB Mirza Azizul Islam, said there is no alternative to "increasing the efficiency of workers" and "value addition" to remain globally competitive.

"Manufacturers also need to diversify goods and explore new markets, and the government has to play an important role in availing duty-free market access," the economist added.