Bangladesh’s exports earnings from sweater products have registered 15.82% growth to $4.25 billion in the last fiscal year.
According to Export Promotion Bureau (EPB) data, in the fiscal year 2018-19, Bangladesh earned $4.25 billion from sweater export, which is 15.82% higher compared to $3.67 billion the FY18.
Talking to Textile Today, sweater manufacturers and trade analysts have opined that technological upgradation has contributed a lot to increase the exports earnings, while extended winter expedite the growth.
However, the manufacturers claimed that the profits margin has slowed down as the production cost went up, while buyers are not increasing prices rather cutting.
“In last couple of year along with the safety standard improvement, the Sweater manufacturers have upgraded machinery and technology to go from manual to automation, Md Moshiul Azam Shajal, a Vice President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told Textile Today.
Installation of new technology has improved quality of products as well as capacity. As a result, global buyers placed more work orders, which has pushed the export earnings up, said the business leader.
In addition, the industry people also attributed the extended winter season in the western world due to climate change impact, which cast positive impact on Bangladesh exports of sweater as demands of winter clothing products increased.
On top of that, there was a redirection of trade from China over the ongoing trade conflict between United States of America and China. As a result, Bangladesh has gained more from the trade tension.
“In the recent years, in China workers wage went up, while increased tariff by the US government have promoted buyers to shifting their business to another countries,” former Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Vice President Mohammed Nasir told Textile Today.
Since Bangladesh offers quality products at a lucrative price, global retailers landed here for buying goods taking the advantage, he added.
However, the manufacturers are facing trouble as the buyers are not increasing prices of goods despite a sharp rise in production costs.
“Our exports earnings have rose but is there any jump in profit margin. The answer is no. this because of sharp rise in production cost,” Md. Moshiul Azam Shajal, also Managing Director, Fame Sweaters Ltd.
On the other, the buyers have become more conservative in price issues and did not increase it rather cut comparing to the previous work orders, he added.
Meanwhile, economist has called for moving towards value addition and increasing productivity to remain competitive in the global markets
There is huge scope of expanding export earnings as we have extra production capacity than the demands. While China’s business shifting is a great opportunity for Bangladesh to grab more market share of sweater, Centre for Policy Dialogue (CPD) Research Director Khondaker Golam Moazzem told.
He urged the manufacturers to invest more on value added products and more attention on productivity development.
In addition, the sweater makers also have to diversify the goods as well as the markets.