Bangladesh’s apparel exports declined by 18.12% to $27.95 billion in the fiscal year 2019-20 as the COVID-19 pandemic slashed global demands for clothing items.
According to Export Promotion Bureau (EPB) data released Sunday, Bangladesh earned $27.95 billion from apparel goods exports, down by 18.12% in the fiscal year, which was $34.13 billion in the same period a year ago.
Of the $27.95 billion, Knitwear products fetched $13.90 billion, which is 17.65% less than the last fiscal year. Woven items earned $14.04 billion, registering an 18.58% negative growth.
For the FY20, the government had set a target to earn $38.20 billion, while in fiscal year 19, the export earnings were $34.13 billion.
Apparel exporters started the fiscal year with a 9.7% positive growth in July but the sector failed to retain the growth except in December 2019 when it gains only 1.26%.
After the COVID-19 outbreak, the sector witnessed the worst scenario and saw a decline by 20.24%, 85.25%, 62.06% and 11.43% in March, April, May and June respectively.
Why the plunge
Lockdowns to stop the spread of coronavirus both in Bangladesh and in the export destination has deeply affected the country’s exports as it hit the production as well as sales in the global brands’ outlets.
On the other hand, consumption saw a decline and to see further in the coming months.
“The export sectors of Bangladesh have been passing through an unprecedented time in our history as COVID-19 has swept through the entire landscape of the global economy. Export has been a lifeline for Bangladesh’s economy and indispensable to maintaining micro and macroeconomic stability in the country, hence such a devastating scenario is alarming,” told Rubana Huq, President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Textile Today.
The compound annual growth rate of our exports during the last 5 years was 6.86%, and the rate was even higher for the last 10 years, 10.70%. Therefore, the export target set by the government for FY20 at $38.20 billion was not over-optimistic, said the business leader.
Such a downfall cannot be traced in the history of this industry so far. The pandemic has devastated the sector, she added.
Global buyers, retailers and brands canceled or held work orders of $3.18 billion due to COVID-19 pandemic.
Work order cancellation and held caused the sharp decline as in the last four months’ exports witnessed the worst case of performance, added Rubana.
In FY20 we lost $6.18 billion in exports. A closer look reveals that out of $6.3 billion lost exports, $1 billion worth of export was lost in the first half of the year and the remaining $5.3 billion dollars were lost in the latter half, Rubana explained.
“New seasons are coming but travel restrictions have not been withdrawn in many countries. So, like before, physical meetings will not be possible. Therefore, both the manufacturers and buyers have to use digital technologies for sharing designs, approving samples, doing b2b meetings, etc.,” Mostafiz Uddin, Managing Director of Denim Expert told Textile Today.
Though the lockdown in western cities are gradually withdrawn, people may not go to shops as many times as before, rather prefer buying clothes online, said Mostafiz.
Hence, e-commerce and online sale will emerge as a new opportunity to recover the loss made during the pandemic and earn good profit. So, both the manufacturers and buyers need to avail of this opportunity, he added.
Meanwhile, the economist suggested tapping the opportunity of new products and the Chinese offer of 97% duty-free market access.
“It will take time to reopen the economy as well as the demands for the clothing items. So, the manufacturers have to concentrate on new products such as personal protective equipment and meditext,” Dr. Zahid Hossain former World Bank Lead Economist in Bangladesh told Textile Today.
He also urged to take advantage of duty-free market access to China as well as to focus on non-traditional markets.