RMG raw material imports down 7.5pc in FY25 Q4

In the April-June quarter of FY25, Bangladesh's ready-made garment (RMG) sector saw a 7.5-percent decline in raw-material imports, standing at over $3.94 billion from over $4.25 billion in the preceding quarter.

The fourth-quarter (Q4) figure was 43.22 per cent of the Q4 export receipts from RMG, according to the Bangladesh Bank (BB) data.

Raw material imports include raw cotton, synthetic fibres, yarns, fabrics, and accessories.

The import value of raw materials was $4.03 billion in the October-December quarter of FY25, accounting for 38.96 per cent of the Q2 RMG export earnings.

Earlier, the import value was $3.89 billion in the July-September quarter of FY25, representing 40.94 per cent of the Q1 RMG export proceeds.

Correspondingly, net exports fell by 15.08 per cent in the April-June quarter of 2025 to $5.17 billion from $6.09 billion in the previous quarter.

Despite this decline, export earnings remained 2.69 per cent higher than the same period last year, indicating some resilience amid the downturn.

Asked, Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the decline in raw material imports during the April-June quarter could affect exports in the coming months.

He noted that exporters are grappling with a gas crisis, restrictive policies of the Bangladesh Bank, and difficulties in opening back-to-back letters of credit (LCs) - factors that are contributing to the drop in raw material imports.

RMG exports reached $9.12 billion in the April-June quarter of FY25, reflecting an 11.92 per cent decline from the previous quarter's $10.35 billion.

Despite this quarterly dip, the figure showed a modest year-on-year growth of 3.15 per cent compared to $8.84 billion in the same period of FY24, demonstrating resilience amid rising global trade barriers, according to the Bangladesh Bank data.

The United States, Germany, the United Kingdom, Spain, France, the Netherlands, Italy, Canada, and Belgium remained the top destinations for RMG exports in the fourth quarter of FY25.

Exports to these countries amounted to $6.55 billion, making up 71.89 per cent of the total export earnings during the quarter.

Net exports - calculated by subtracting raw material import costs from gross RMG earnings - stood at $5.18 billion, accounting for 56.78 per cent of the sector's total exports in the fourth quarter of FY25.

This quarter posed several challenges to the industry. Global economic slowdowns and trade policy uncertainties weighed heavily on performance.

Notably, the United States announced a 35 per cent tariff on certain imports, which, though not yet enforced, triggered order delays and market jitters.

Compounding the problem, India imposed restrictions on RMG imports via land routes, disrupting logistics and limiting market access.

Meanwhile, a strike by the National Board of Revenue (NBR) employees caused customs bottlenecks and delayed shipments.

Despite these setbacks, year-on-year RMG exports posted a 3.15 per cent rise in the fourth quarter of FY25, supported by both knitwear and woven segments.

However, the figure fell short of the preceding quarter's $10.35 billion.

The sector contributed 7.99 per cent to Bangladesh's nominal GDP in the reporting quarter alone.

During the full fiscal year of FY25, total RMG export earnings reached $39.35 billion, an 8.90 per cent increase over the previous year.

RMG's overall contribution to the country's nominal GDP stood at 8.52 per cent.

In the fourth quarter of FY25, knitwear exports earned $5.02 billion, down 5.47 per cent from the previous quarter's $5.31 billion but up 5.69 per cent from $4.75 billion in the fourth quarter of FY24.

Demand remained strong in key markets like the US and the European Union.

Woven garment exports generated $4.10 billion in the quarter, 18.71 per cent lower than the previous quarter's $5.04 billion, according to the central bank data. However, this still marked a marginal 0.20 per cent year-on-year increase from $4.09 billion.

Woven exports were buoyed by a robust backward linkage industry, smooth raw material sourcing, and adaptability to evolving fashion trends.

During the reporting period, exports to the nine major destinations generated $7.24 billion in total, with RMG accounting for $6.55 billion or 90.51 per cent - 48.93 per cent from knitwear and 41.58 per cent from woven garments.

Compared to the third quarter of FY25, exports to these countries rose by 7.13 per cent (from $6.77 billion), though they fell 8.79 per cent year-on-year from $7.95 billion in the fourth quarter of FY24.

sajibur@gmail.com