Bangladesh apparel export growth in the EU and the USA – the two key markets – in January-July 2021 period grew.
According to Eurostat, the EU imported $9.17 billion readymade garment (RMG) from Bangladesh between January-July 2021, registering a little over 18% growth – which was $7.75 billion compared to the same period in the previous year.
Similarly, in the US market, Bangladesh’s exports performed better during the same period, according to OTEXA data.
In January-July 2021, Bangladesh apparel export increased by 28.04%, earning $3.7 billion which was $2.89 billion compared to the same period in the previous year.
Although neighboring India and Pakistan surpassed Bangladesh in terms of export growth in the two crucial markets in January-July 2021. In spite of Bangladesh’s obtaining a good quantity of apparel work orders from the EU and the USA.
Industry experts expressed that the two countries take advantage of their competitive advantages.
According to Eurostat, neighboring Pakistan and India’s RMG export growth was 28% and 22% respectively.
In January-July 2021, Pakistan exported $1.66 billion worth of apparel in the EU market, which was $1.3 billion compared to the same period in the previous year. Witnessing 27.89% growth.
While India exported $2.48 billion worth of apparel in the EU market, which was $2.03 billion compared to the same period in the previous year. Fetching a 22.23% growth.
According to Eurostat data, European countries imported around $38 billion worth of apparel items in the January-July period this year, up by 13% over the same period a year ago.
Other top garment exporters to the EU market are Turkey, India, Cambodia, Vietnam, Pakistan, Morocco, Sri Lanka and Indonesia.
Likewise, in the US market, exports from India and Pakistan during the same period performed better growth over Bangladesh, according to OTEXA data.
In January-July 2021, Pakistan’s RMG export grew by 69.14% in the US market, earning $1.16 billion which was $0.68 billion compared to the same period in the previous year.
OTEXA data also revealed that India’s apparel export increased by 33.10% in the US market, earning $2.31 billion which was $1.74 billion compared to the same period in the previous year.
Bottleneck for Bangladesh apparel
Bangladeshi RMG exports opined that a steep rise in yarn prices – a crucial element that accounts for 50-60% cost of a fashion item – has given India and Pakistan a superiority over Bangladesh as the neighboring countries can source yarns locally at prices 30%-50% lower than in Bangladesh. Also, these two countries can offer clothing items at comparatively low prices.
Globally cotton prices had been rising since the start of this year, leading to a rise in yarn and fabric prices.
RMG entrepreneurs have accused that Bangladeshi spinning mills have been charging much higher than in the global market, while spinners have recurrently explained that they surged prices in line with cotton prices.
Though both parties recently reached an agreement on stalling yarn prices.
Yarn price differences between local and global markets
As per the global market data, the present cotton price is a little less than 95 cents per pound. Cotton imported by Bangladesh is mostly used to produce 30 count yarn meant for manufacturing knitwear items.
Apparel exporters expressed that per kg yarn price should not cost more than $3.8, including all expenses, but is being traded at $4.15-$4.2 on the local market.
On the other hand, textile millers say it costs about $4.12 to produce 30 count yarn per kg of yarn, which they offer at $4.2 per kg.
Drawing a comparison between 30 cotton-carded yarn prices in Bangladesh and India, Fazlee Shamim Ehsan, Chief Executive Officer at Fatullah Fashion Limited said to media that per kg import cost of the same yarn from India is $3.60, which is sold at $4.15 per kg in Bangladesh. But Indian buyers get the same at $3.5 per kg.