50 Star US Inc.
The last two months have seen a decline in Bangladesh's exports of garments, but the exporters expect to finish the current fiscal year on a high note. On the other hand, the readymade garment industry will do better in the upcoming fiscal year 2023–2024 in terms of export revenue because it will profit from its rivals' political unrest and natural disaster, which have already hurt their ability to sell their goods abroad.
Bangladesh will benefit more from trade disputes between the US and China in addition to these. In the meantime, a restriction on cotton from Xinjiang that uses forced labor will assist Bangladesh win export orders from Vietnam as the US government purportedly withholds from goods made in Vietnam from Xingjian cotton.
Despite the fact that Bangladesh's readymade garment exports fell by 15.48 percent to $3.32 billion in April for the second consecutive month, the sector's exports increased by 9.09 percent to $38.57 billion from July to April of FY23, compared to $35.36 billion during the same period of FY22.
Therefore, it provides a promising hint that the RMG industry would end FY23 with positive profitability. Additionally, the earnings trend at this time indicated that while growth would likely be slower than in the previous year and below exporters' targets, it would not plunge in the negative.
However, experts' predictions and information from insiders in the industry indicate that Bangladesh apparel exports will increase significantly in FY24 as a result of Vietnam's ban on the use of cotton from Xinjiang, Pakistan's political unrest, Sri Lanka's crisis, and the effects of the earthquake in Turkey.
On the other side, Bangladesh will benefit greatly from the China-US trade spat by selling more garments to the US. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan predicted that Bangladeshi clothing exporters would do better in exports during the upcoming fiscal year and that the current fiscal year would end with positive development.
Bangladesh currently has a few advantages, such as the political unrest in our competitors' nations. The businessman predicted that the US-China trade war would gain in the ensuing days. According to the most recent statistics provided by the General Administration of Customs of China, the country's export of textiles, apparel, and clothing accessories totaled $67.229 billion in the first quarter (Q1) of 2023, a decrease of 6.74 percent from the same time last year.
Bangladesh might benefit more from the US-China trade dispute if it produces more goods that are imported into the region at a time when buyers are looking for South Asian countries to import from, according to finance adviser AB Mirza Azizul Islam.
According to the economist, in order to do this, we need good and reliable data, market research, and relationships with Chinese buyers. Exports have suffered as a result of political unrest and crises in Pakistan and Sri Lanka.
According to statistics provided by the Central Bank of Sri Lanka, the country's garment exports totaled $1,157.9 million from January to March 2023, a decline of 14.9% from the $1,360.6 million in exports during the same period of the previous year. Bangladesh now has more options after Vietnam was penalized for using cotton from Xinjiang. The US government has halted the shipment of Vietnamese clothing due to allegations that the country used cotton from Xinjiang, where forced labor was once used to pick cotton.
Bangladesh must exercise greater caution when taking advantage of the opportunity so that exporters cannot use cotton from Xinjiang to make clothing products. Bangladesh's clothing producers are in a secure position and may even gain in some ways since Vietnam's clothing producers are under pressure owing to the US not clearing consignments, citing Xinjiang cotton-made products, said industry insiders.
This is as a result of the Uyghur Forced Labor Prevention Act (UFLPA) of the US government, which went into effect on June 21, 2022. According to media sources, by using cotton and exporting to a country in North America, some Vietnamese businesses have assisted Chinese companies in avoiding US taxes or penalties.
As a result, $15 million worth of shipments of clothing and footwear were delayed for UFLPA inspections; more than 80% of these shipments came from Vietnam. The majority of the yarn and fabric used by Vietnam's apparel manufacturers comes from China, in contrast.
However, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) argued that because all clothing producers are aware of the US restrictions against Xinjiang cotton, they are in a safe zone. Leaders of the Bangladesh Knitwear Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) both commented on the matter and claimed that they had sent a letter to all members to clarify the provenance of cotton before importing raw materials from any nation. According to Mohammad Hatem, executive president of BKMEA, "as the US government seized Vietnam's clothes, Bangladesh will gain advantage as the US buyers' confidence will decline for importing goods from Vietnam and they will place orders here."
Vietnam's exports of textiles and apparel decreased by 18.1% during January to April 2023, totaling $9.720 billion. All projections, however, will be based on the state of the world economy, the business climate in Bangladesh, and the kind of policy support that will be provided for the upcoming fiscal year.
According to analysts, the government must create a welcoming atmosphere and policy assistance in order to maintain export development and seize the chance. To gain long-term success, they stressed, sector participants must create innovative products and adopt sound business practices. Bangladeshi clothing manufacturers have put a lot of effort into this area, and shoppers around the world are starting to take notice. The most recent Vendors Conference took place in HQ Amsterdam on April 2023, and Bangladeshi vendors for G-Star earned 5 out of 10 prizes.
Country Heads of several international purchasers claim that the apparel industry is prepared to offer more complicated products with original designs. As many brands use local designs, local designers are doing a terrific job, which could be another driver for the industry's prospective growth.
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