Apparel exports to US soar in Oct, marking double-digit growth

Bangladesh’s apparel exports to the United States saw a strong surge in October, with both value and volume witnessing a double-digit growth, driven by seasonal demand.

According to data from the Office of Textiles and Apparel (OTEXA) under the US Department of Commerce, US imports of apparel from Bangladesh in October 2024 reached $731 million, a 26 per cent increase compared to the $578.49 million recorded in October 2023.

In terms of volume, Bangladesh’s garment shipments to the US saw a 25 per cent rise, reaching 227.5 million square metres in October 2024, up from 181.8 million square metres in the same month last year, the data showed.

In September 2024, Bangladesh’s apparel exports to the US also experienced substantial growth of 19 per cent in both value and volume, reflecting the country’s strong position in the global apparel market.

According to the data, the country shipped 216.2 million square metres and fetched US$705.20 million in September this year, while the figures were 181.7 million square metres and US$ 594.44 million in September 2023.

Talking to the FE, exporters said that October 2024 recorded the highest growth in both quantity and value, making it a peak month for Bangladesh’s exports to the United States, driven primarily by strong seasonal demand.

They attributed the surge in shipments to the peak season for ready-made garment (RMG) exports, with factors such as the pre-holiday rush — including Christmas, Black Friday, and Thanksgiving Day — along with buyers’ end-of-year procurement strategies, all contributing to the sustained double-digit growth.

Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the demand in the major markets like European Union and the US is on the rise.

“As a result, work orders are also coming into the country in recent months,” he said, expressing the hope that the trend might continue in the coming months.

He noted that uncertainty regarding potential new duties on imports from China under the new US government has prompted buyers to place orders in countries other than China.

MA Rahim, Vice Chairman of DBL Group, said that there has been a steady flow of work orders in recent times, particularly for compliant factories while non-compliant ones may not be experiencing the same level of demand.

However, exporters have raised concerns about a decline in export retention, attributing it to the significant rise in the cost of doing business.

Meanwhile, the US’s apparel imports from Bangladesh during January to October this year decreased by 3.31 per cent to US$6.14 billion, which was US$6.35 billion during the corresponding period of last year.

The decline was sharper, compared to the overall world import fall of 0.43 per cent, indicating that Bangladesh’s performance was below the global trend.

However, the country’s competitors such as Vietnam, India, Pakistan and Cambodia experienced positive growth during this period.

In terms of volume, Bangladesh exported 1.96 billion square metres of apparel during January-October period of 2024, with a 1.6 per cent growth.

OTEXA data showed that Bangladesh retained a substantial share of 9.12 per cent, positioning it as the third-largest apparel exporter to the US after China having 20.83 per cent market share and Vietnam having 18.88 per cent market share.

The US’ apparel imports from Vietnam grew by 3.87 per cent to US$ 12.70 billion in January-October of 2024 while imports from China declined by 1.41 per cent to US$14.03 billion.

Cambodia’s garment exports grew by 12.85 per cent to US$3.22 billion during the first ten months of 2024, compared to US$2.8 billion in the same period in 2023.

India’s RMG exports to the US market increased by 2.68 per cent to $4.05 billion, while that of Pakistan grew by 4.44 per cent to US$1.79 billion during the same period.

According to a latest Research and Policy Integration for Development (RAPID) study, Bangladesh absorbed much of the EU market share lost by China as it shifted away from low-value apparel production, while Vietnam benefited more from this shift on the US market.

The country’s share of the EU apparel market rose from 6.0 per cent in 2010 to 22 per cent in 2023, compared to Vietnam’s modest growth from 2.0 per cent to 4.7 per cent over the same period.

However, in the United States, where both countries face identical tariffs, Vietnam captured a significantly larger slice of market cake, rising from less than 1.0 per cent to 18 per cent, compared to Bangladesh’s slow-pace increase from 3.3 per cent to 9 per cent.

Exporters said Bangladesh is lagging behind due to many of its internal issues and buyers are now placing orders with shorter lead times due to various factors.

This situation puts China and Vietnam, with their shorter lead time and more consistent energy supplies, in a stronger position, they noted, adding that the gas crisis is making it difficult for them to meet existing lead time.

Source: The Financial Express | 08 December 2024 | Author: Monira Munni