Despite the global demand for textiles and apparel being on the rise, Bangladesh continues to struggle to secure a share of this expanding market due to recent cost escalations. The country is witnessing a modest increase in demand while, on the other hand, China has experienced significant growth in inspections and audits by buyers, both from within China and internationally.
There was a 20 per cent rise in global demand for textile and apparel inspections audits in Q1FY24, reports quality control company QIMA. This growth can be attributed to various factors such as improving consumer sentiment, inventory replenishment after the holiday season, and the need for larger shipments to mitigate longer freight-transit times caused by the Red Sea crisis.
Despite China's resurgence in popularity among apparel brands, other competitors in Asia and beyond are also keeping pace. In Bangladesh, both US- and EU-based brands have increased their procurement, raising hopes for the country's export sector. However, concerns linger regarding the Bangladeshi government's recent policy move to reduce cash incentives for garment exports.
According to OTEXA data, Bangladesh's RMG exports to the US declined by 19.24 per cent in value and 12.79 per cent in volume during the first two months of 2024 compared to the same period in 2023. Similarly, exports to the EU also declined by 26.74 per cent during this period.
Fazlul Hoque, Former President, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), highlights, China's aggressive pricing strategy poses a challenge for Bangladesh, which faces increased production costs.
Mahmud Hasan Khan, Former Leader, BGMEA, acknowledges the increasing inquiries from buyers but expresses concerns about the escalating costs of doing business, particularly due to issues with gas and electricity supply and the reduction in cash incentives.
Despite these challenges, Bangladesh’s export sector continues to be optimistic with emerging markets such as Australia, Japan, India, and Korea showing interest.
However, Bangladesh would first need to address cost-related issues and maintain competitiveness to capitalise on the growing global demand for textiles and apparel.
