RMG exports to the US fell 17% in January-March

Bangladesh’s garment exports to the US, the country’s largest export destination, fell by more than 17 percent year-on-year to $1.75 billion in January-March, according to the Office of Textiles and Apparel (OTEXA), a body under the American Commerce Department.

The decline is clearly visible in both the value and volume of exports.

US import figures show that Bangladesh’s main ready-made garment competitors, China and Vietnam, outperformed Bangladesh in the first quarter.

Exporters cite a number of domestic problems, such as long lead times, inconsistent energy supplies and overall high costs of doing business, due to their loss of export share in the US market.

These same factors, they say, give China and Vietnam an advantage in the US market.

US apparel imports from Bangladesh totaled $1.75 billion between January and March this year, compared with $2.13 billion in the same period of 2023, OTEXA figures released on May 2 show.

In the first quarter, the country shipped 11.92 percent fewer garments, or 586.09 million square meters, compared to the previous year’s 665.42 million square meters.

Although Chinese clothing exports to the US, on the other hand, experienced a slight decline in value, they did experience volume growth.

However, total U.S. apparel imports fell 7.14 percent to $18.07 billion in the first quarter of 2024, down from $19.46 billion in the same period of 2023.

Mohammad Hatem, executive chairman of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said buyers are now placing orders with shorter lead times due to various factors. This situation puts China and Vietnam, with their shorter lead times and more consistent energy supplies, in a more favorable position.

Exporters are struggling to meet lead times for ongoing work orders due to a severe gas crisis, he told The Financial Express on Saturday.

He added that it is difficult to meet production timelines as it takes 15 to 20 days to obtain fabric due to gas and electricity shortages. Bangladesh also cannot receive all materials efficiently due to the lack of a deep-sea port, further delaying import and export activities.

The BKMEA leader said high production costs due to rising gas prices, recent wage hikes and expected increases in electricity tariffs are affecting their competitiveness.

“In many cases, we cannot receive the work orders because buyers offer prices below the cost of production,” he noted.

SM Mannan Kochi, chairman of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said price is the most important factor.

“Buyers are offering lower rates while production costs are steadily rising,” said Mr Kochi, calling for measures to reduce costs and ensure fair clothing prices to remain competitive.

RMG exports to USA

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Abdullah Hil Rakib, managing director of Team Group and also vice president of BGMEA, attributed the decline to the Red Sea crisis.

OTEXA data shows that China’s apparel exports to the US reached $3.44 billion in the first three months of 2024, down 0.71 percent.

China saw a volume growth of 9.79 percent and exported 1.92 billion square meters of clothing in the first quarter.

Vietnam’s apparel exports to the US rose 0.91 percent to US$3.39 billion in January-March 2024. US clothing imports from Vietnam also increased by 11.54 percent to 1.08 billion square meters.

US imports of RMG from Cambodia rose 11.13 percent to $807.87 million in January-March, compared to the same period in 2023. Indian exports of RMG to the US market fell 8.79 percent to $1.21 billion dollars, compared to $1.33 billion in the same period of 2023. 2023.

U.S. imports of RMG from Indonesia fell 14.16 percent to $1.02 billion in the first three months of 2024, compared to $1.19 billion in the same period of 2023.

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