Apparel exports to US, Canada post double-digit growth

Bangladesh's apparel exports to major markets namely US and Canada posted a double-digit growth in the last fiscal year while that of European destinations showed a comparatively slow pace.

Garment makers, however, said the ongoing trade war between the US and China helped in achieving such a higher growth in apparel export especially to the US market.

They also held responsible a number of factors for slow growth in the EU countries that included diversified market options with price choice, competitor countries' devalued currencies and buyers' cautious order placing due to the last general election and wage hike in the country.

Official data by Export Promotion Bureau (EPB) revealed that the US has again become the largest export destination for local readymade garment (RMG) items with earnings $6.13 billion in the just-concluded fiscal year, recording a 14.60 per cent growth.

RMG exports to US fetched $5.35 billion in fiscal year 2017-18.

When asked, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) senior vice president Faisal Samad said, "In recent months, US buyers are coming to Bangladesh as an alternative to China due to the trade war between the two countries."

In last six months, US buyers were showing more interest, making queries and placing more orders, he noted.

Echoing Mr Samad, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Fazlul Hoque said US buyers were shifting a good volume of their orders to other destinations including Bangladesh from China due to rising costs there.

He, however, expressed the hope that shifting trend would be continuing in the coming days and Bangladesh would remain a competitive destination for them.

The possible diversion of trade from China caused by the punitive tariff may also be subject to a number of other factors like changes in the Yuan exchange rate and use of advanced technologies and robotics.

BGMEA president Dr Rubana Huq said, "Considering the trade war as an opportunity for Bangladesh, we need to look at the export similarity between Chinese and Bangladeshi products exported to USA."

Citing an analysis, she said out of the top 30 items exported by China to USA, Bangladesh competes on 16 items.

Export of these Chinese items during 2014-2018 declined by 11.84 per cent, she said, adding that export of these Bangladeshi items also had dent by 12.28 per cent whereas Vietnam was apparently the gainer as it registered 16.82 per cent growth.

The share of these 16 items of the total apparel exports to USA by China was 45.12 per cent, Bangladesh 76.70 per cent and Vietnam 53 per cent in 2018, Ms Huq said.

Regarding Bangladesh's gains from the US-China trade war, she explained that currently, there are 5,733 tariff lines on $200 billion worth of imports which include $3.7 billion dollar worth of apparel. This is currently under 25 per cent duty imposed by the US on China.

In general, US import has grown 11 per cent on a month-on- month basis. On a year-on-year growth figures, volumes are up by 5.5 per cent and value is up by 6.6 per cent.

Bangladesh and Cambodia have gained 10.2 per cent on year-on-year growth, Pakistan 10.16 per cent, India 8.5 per cent, China 6.8 per cent and Vietnam 4.7 per cent.

"So, Bangladesh continues to grow but the growth, in terms of value, must be looked into," she noted.

About the growth in EU countries, Mr Samad said EU buyers have price choices due to diversified market options like Myanmar.

Moreover, devaluated currencies in competitor countries like India, Pakistan and Vietnam also help them offer competitive price than Bangladesh, he observed.

The EU buyers have also placed orders cautiously in Bangladesh over the possible volatile situation after the national election and wage hike, Mr Samad added.

Mr Hoque said he visited the UK and Germany early this month where buyers referred to slow market demand there.

Bangladeshi RMG export to the UK grew by 3.62 per cent to $ 3.85 billion in the last fiscal year which was $3.72 billion in fiscal year 2017-18, according to the data.

Apparel exports to Germany stood at $5.84 billion, registering 4.68 per cent growth in last fiscal.

RMG export to Spain grew by 5.68 per cent to $2.40 billion, Italy by 5.63 per cent to $ 1.53 billion, the Netherlands by 9.52 per cent to $1.02 billion, Belgium by 8.52 per cent to $765.74 million and Poland by 36.54 per cent to $1.18 billion in the last fiscal year.

Besides, Canada imported apparel worth $1.17 billion in last fiscal year, up by 22.44 per cent from the previous fiscal, according to the data.

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