Bangladesh's RMG exports to EU fall amid inflation, dampening demand

Exporters blame high inflation and rising interest rates globally dampening consumer demand that created a surplus in inventory in Western retail stores and discouraged buyers from placing fresh orders.

Exports of both knitwear and woven apparel to the EU last year declined, Eurostat figures show. Knitwear fetched €10.64 billion, down from €13.95 billion in 2022. Woven items earned €6.74 billion compared to €7.95 billion in 2022.

The overall EU import of apparel in 2023 from also dropped by 16.22 per cent YoY to €83.19 billion.

Bangladesh's top competitors, China and Turkiye, also witnessed negative growths in export to the EU market last year, domestic media outlets reported.

China's apparel exports to the EU last year were worth €22.73 billion, accounting for a 21.54-per cent decline. Similarly, EU apparel imports from Turkiye recorded a drop of 13.23 per cent to €9.93 billion in the year.

Germany, the single-largest market for Bangladesh's clothing in the EU, saw a drop of about 17 per cent last year, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

As retail sales in December improved following Christmas, leading to a decrease in inventory levels, BGMEA hopes for a turnaround.

BGMEA is concerned over not getting fair prices despite recent wage hike as costs for buyers have also gone up due to the long transit time arising out of the Red Sea crisis that has resulted in transit delays.

Fibre2Fashion News Desk (DS)