Bangladesh’s apparel exports to the United States grew by 6.73 percent in the first quarter of 2020 year-on-year, strengthening the country’s position as the third-largest supplier to the American market, after Vietnam and China.
The country witnessed this growth at a time when US apparel export growth is again back to single digits, from double-digit growth last year.
China, the largest apparel supplier of the world, has lost its first position to Vietnam in the US market, recording the steepest fall at 43.12 percent to $3.26 billion.
Meanwhile, Vietnam saw a growth of 4.50 percent to $3.36 billion during the same period.
Bangladesh fetched about 1.67 billion from apparel exports to the US during the January-March period in 2020, against $1.56 billion earnings during the corresponding period of 2019, according to the US Department of Commerce affiliated Office of Textiles and Apparel (Otexa).
However, the country’s apparel export earnings witnessed over an 85 percent decline to $375 million in April 2020, which was $2.54 billion in the same period last year.
Experts and exporters opined that the growth happened since Bangladesh had not been affected by the novel coronavirus till March. At that time, Chinese factories faced closures and supply chains had been disrupted due to the Covid-19 outbreak.
The US also witnessed a tough phase of the outbreak, resulting in retail store closures. As a result, their imports fell by 12.07 percent to 17.84 billion in the first quarter of 2020.
Exporters believe that Bangladesh’s apparel exports will observe the effect the outbreak of coronavirus for the next two to three months as most factories were closed for the last one month – March 26 to April 26.
Between January and March 2020, Bangladesh shipped 602.98 million square metres of apparel goods to the US. The figure was 570.08 million square metres in the previous calendar year, as noted in the latest update by Otexa.
Readymade garments (RMG) exports of Indonesia and India also fell by 4.42 percent and 1.50 percent, respectively.
But apparel exports from Cambodia and Pakistan saw growths of 14.4 percent and 13.8 percent, respectively.
“It is very challenging and very difficult to project about the future of our exports until buyers place fresh orders,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Senior Vice President Faisal Samad told The Business Standard.
Samad added the situation can be determined by the middle of July as that is when buyers usually place orders for next spring and summer – May to the mid-July.
“After factories resumed operations, some exporters shipped their backlogged goods,” he added.
Dr Ahsan H Mansur, executive director of the Policy Research Institute, Bangladesh (PRI), said the Covid-19 outbreak has shaken the global economy, and exports are also a part of it. The supply chain and export destinations have already been disrupted.
“Bangladesh’s export earnings witnessed the effects of the pandemic in April. In the next months, apparel exports will be better than April,” he hoped.
If buyers place new orders, that will bring hope, but the customers will not buy apparel products like they used to, Mansur said, adding “recovery will be very slow.”
BGMEA President Rubana Huq pointed out that the growth of US imports from Bangladesh has actually slowed down compared to the same period last year – growth in the first quarter of 2019 was 15.93 percent compared to that in 2018.
“It may be noted that US imports from China have declined massively amid the coronavirus outbreak since the beginning of this year,” she added.
Imports from China plummeted by 43 percent in value. The overall US import has slowed down by 12 percent both in value and quantity, indicating that the demand curve is heading downwards, the BGMEA president further said.
According to the BGMEA, cotton products constitute a share of 74.14 percent of Bangladeshi apparel exports. Against an increased demand for cotton, import of the item from the US has increased over the last few years.