Apparel exports in the last fiscal year declined to the main and second-largest single destinations, the United States (US) and Germany.
According to country-wise detailed data published by the Export Promotion Bureau (EPB) and compiled by the BGMEA, Bangladeshi manufacturers shipped apparel items worth $8.51 billion to the US – the single largest export destination in FY23 – a 5.51% decrease from $9.01 billion in the last financial year.
In FY23, they delivered RMG items worth $6.68 billion to Germany, the second-largest single export market, witnessing a negative growth of 6.81% from $7.16 billion in the previous fiscal.
During that fiscal year, the overall earning was $46.99 billion, registering a moderate YoY growth of 10.27%, which was $42.61 billion in the last fiscal (FY22).
However, Bangladesh witnessed a moderate positive growth of 11.78% by exporting apparel items worth $5.26 billion to the UK, the third largest destination, higher from $4.49 billion in FY22, EPB data stated.
Apparel exports to other major destinations such as Spain, France, Italy and the Netherlands increased by 18.53% to $3.78 billion, 23.15% to $2.94 billion, 42.14% to $2.26 billion and 25.58% to $1.85 billion, respectively.
Overall apparel exports to the European Union (EU) in FY23 soared by 9.93% to $23.52 billion from $21.4 billion of FY22.
In FY23, exports to Canada reached $1.54 billion, fetching a YoY growth of 16.55% from $1.32 billion in the last FY.
Nontraditional market
The apparel export to the non-traditional markets in the FY23 reached $8.37 billion with a 31.38% YoY growth from $6.37 billion in the last FY22.
Japan, Australia, Russia, India, China, South Korea, UAE, Malaysia, Brazil, Mexico and some other countries are known as non-traditional markets.
Among the major destinations of the non-traditional markets, exports to Japan reached $1.60 billion, with a YoY growth of 45.62% from $1.09 billion in the last fiscal year.
Apparel export to Australia and India touched the milestone of $1 billion for the first time.
Bangladesh exported apparel items worth $1.15 billion to Australia in FY23, fetching a growth of 42.48%, higher from $812.24 million of FY22, EPB data stated.
Earnings from India stood at $1.01 billion in FY23, a 41.58% higher from $715.61 million in FY22.
According to EPB data, non-traditional market exports to South Korea, Mexico, and UAE climbed by 22.45% to $538.46 million, 26.50% to $348 million and 3.53% to $292.37 million, respectively.
However, despite being a potential destination, export to Russia declined by 26.96% to $426.39 million due to ongoing war.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan said apparel exports enjoyed growth in the FY23 due to some high-value products.
He also mentioned that exports to markets, such as Australia, Japan, Korea and India are contributing a lot to the export growth in and non-traditional markets.
Regarding the decline in the US and Germany, he said that the exports have declined due to interest rate hike and high inflation has slowed down demand in that country.
“Not only Bangladesh, but other countries also recorded negative growth in exports to the US market. We however recorded slower negative growth compared to other nations,” he added.
“Though inflation has started to go down in the USA, Bangladesh's exports there may continue to decline for a few more months unless their economy rebounds.”
He was optimistic that apparel exports to the USA would rebound from December onwards but it would not be easy as both the unit prices and exports volume declined by 19% and 30% respectively.
He sought government policy support for further diversification of apparel goods, particularly non-cotton or man-made fibre items, as they are now dominating global markets.
He also sought cooperation from all stakeholders including government, development partners, and buyers to address the challenges of the current crisis period.
BGMEA Director Mohiuddin Rubel told the Dhaka Tribune that although the overall growth in Europe is good, the growth is negative in Germany, the biggest market in EU, and also in Poland.
“Due to the war, Germany is facing some internal problems which impacted their import,” he added.
He also said that the growth in the US, the largest single market is also negative, which is disappointing. In the US, their market demand has fallen, the bank has raised interest rates to tame inflation, and other economic pressures which influenced exports.
“Our position in new markets is very good as growth has been good in almost all destinations. Exports to some countries have exceeded billion-dollar. Since there are issues in the US and the West, we should focus on new markets,” he added.
He also said that most of the new market countries are emerging economies with great potential for the exporters.
“However, considering the global economic conditions, we really did well. We have to focus on infrastructure, ease of doing business, products and market diversification to sustain the growth,” he added.
In the recently concluded FY23, Bangladesh earned $55.55 billion from exports destinations.
