EU slowdown, Brexit affect woven exports
The fall was likely contributed by the downtrend in the European markets, which is the largest importer of Bangladeshi apparel products
Bangladesh's export earnings from woven products have seen a near 8 percent fall to $5.03 billion in the first four months of the current fiscal year.
Industry insiders said the fall is likely to have been contributed by the downtrend in the European markets - the largest importer of Bangladeshi apparel goods.
This is because of a slowdown in the economy of the 28-country bloc, along with the uncertainty looming over the Brexit.
Speaking to The Business Standard, former president of the Bangladesh Garment Manufacturers and Exporters Association Siddiqur Rahman said, "The export of woven products is not doing well, as we are losing our competitiveness compared to other countries in the sector."
The appreciation of taka against the US dollar could be another reason for Bangladesh losing competitiveness in apparel exports, he added.
"Woven apparel exports witnessed a negative growth for two major reasons - lead time and the lack of a strong backward linkage industry"
Bangladesh Knitwear Manufacturers and Exporters Association First Vice President Mohammad Hatem said, "Woven apparel exports witnessed a negative growth for two major reasons - lead time and the lack of a strong backward linkage industry."
He added that much of the Chinese investment shifted to Myanmar, which is why they saw good growth in export earnings from woven products.
"Bangladesh is losing its share in the international market for woven items. Besides, Vietnam and Cambodia are also doing well in this industry."
Currently, Myanmar needs only three to four days to import fabric from China, while Bangladesh needs 25 to 30. Additionally, it needs 20 to 25 days for exporting products.
Such a large difference in the lead time knocked down Bangladesh's apparel industry.
"Increase in the lead time is the reason for importers diverting their orders to other countries continuously," Hatem added.
Dr Nazneen Ahmed, senior research fellow at the Bangladesh Institute of Development Studies said Bangladesh is losing competitiveness due to longer lead time compared to our competitors as apparel makers are highly dependent on imported fabric.
As of now, Bangladesh can meet about 35 to 40 percent demand for woven fabrics.
"The country exports more woven items to the United States, but the European Union market imports more knitwear. As a result, a downtrend has been seen in the market," she added.
According to Eurostat, the statistics directorate of the European Commission, Bangladesh exported denim products worth $977.65 million, down by 11.04 percent, during the January-August period of 2019, which was $1.10 billion for the same period a year ago.
During the first eight months of 2019, global denim exports to the European Union declined by 11.84 percent to $3.40 billion, which was $3.86 billion in the same period last year.
Square Denim Ltd General Manager Sayeed Ahmad Chowdhury emphasised on analysing data of other competing countries to identify the overall export scenario of specific items.
