Bangladesh’s exports shipment of knitwear goods posted an 11.19% growth to $16.88 billion in the fiscal year 2019-20, thanks to strong backward linkage industry.
According to the Export Promotion Bureau data, readymade garment (RMG) sector earned $34.13 billion, up by 11.49%, which was $30.61 billion in the previous fiscal year.
Of the $34.13 billion, Knitwear products fetched $16.88 billion, which is 11.19% higher compared to $15.18 billion in the last fiscal year.
Woven items earned $17.24 billion, registering an 11.79% growth, which was $15.42 billion a year ago.
Why exports of knitwear performed better
Firstly, the total apparel exports showed a double digit’s growth and as a part of the clothing sector, knitwear export earnings also registered double-digit growth.
In addition, a strong backyard linkage industry is another key factor, which helped the sector to earn more.
Currently, local manufacturers are capable of supplying 85% of yarn and fabric, along with 40% of woven fabric, required by the knitwear sector.
As per BTMA, there are 430 yarn manufacturing mills, 802 textile mills, and 244 dyeing-printing finishing mills in Bangladesh, along with 32 denim fabric manufacturing mills and 22 home textile manufacturing mills.
The sharp rise in non-traditional export markets also has contributed a lot to maintain a double-digit growth in export earnings from the knitwear products.
As per the EPB data, in the fiscal year, Bangladesh’s exports of knitwear goods to new markets rose by 20.68% to $2.88 billion, which was $2.39 billion.
On the other hand, knitwear products exports to Canada also registered a sharp rise by 28.50% to $528 million, which was $411 million a year ago.
On the other hand, economists have opined the US-China trade war, and the good performance of apparel exports in non-traditional markets acted as a catalyst for the rise in apparel export.
What sector people say
“As a sourcing destination for apparel goods, Bangladesh is safer than what was in the past. This is only because of the safety improvement and compliance, which boosted global buyers’ confidence to buy clothing products from us,” Mohammad Hatem, Managing Director of MB Knit Fashion Ltd told Textile Today.
On the other hand, Bangladesh is very strong in the backward linkage industry for the knitwear sector, which helps makers to ship goods within a shorter time span. As a result, global retailers chosen Bangladesh to buy goods from here said Hatem, also a former vice president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
In addition, Bangladesh offers quality products at a reasonable price to the retailers, he added.
On top of that, manufacturers moved for new market explorations, and product diversification, which altogether pushed the export earnings up, said Hatem.
However, economists have said the US-China tariff war opened an opportunity for Bangladesh as the global buyers shifted orders from China to Bangladesh, which pushed export earnings including knitwear goods up.
“It is a spillover effect of US-China trade war, which helped Bangladesh to grab more work orders from Chine relocation,” Policy Research Institute (PRI) Executive Director Ahsan H Mansur told the Textile Today.
He urged the manufacturers to concentrate on making those goods, which were being sourced from China as the makers are fleeing from the country and looking for a reliable destination.
Needs to move for value addition to grow
“Since Bangladesh has strong backward linkage for knitwear goods, it is high time for manufacturers to concentrate on higher value-added goods to earn a better price,” former caretaker government adviser AB Mirza Azizul Islam told the Textile Today.
In doing so, the makers have to introduce the latest technology and increase investment in research and innovation, said the economist.
He also urged the government to come up with special measures to diversify goods and helping to produce value-added products.
Who are larger importing countries?
Germany is the single largest export destination for Bangladeshi knitwear products. In the last fiscal year, Bangladesh earned $3.30 billion exporting knitwear goods, which was $3.22 billion.
The United Kingdom, the second-largest export markets, imported goods worth $2.02 billion, which was $1.89 in the previous year.
The US, the single largest export markets for Bangladesh RMG goods, imported knitwear products of $1.51 billion, which was $1.37 in the previous year.
Among the non-traditional export markets, Japan is a promising market for Bangladeshi knitwear products, which imported goods of $603.71 million, which was $444.80 million a year ago.
While, Russia is the second largest in the non-traditional market category with an import of $293 million, which was $261 million.
As a South Asian market, India is a very potential market, which imported knitwear products of $130 million compared to the previous $71 million.