2023 won’t fare well for apparel trade: BGMEA

The rest of the year 2023 will not fare well in terms of apparel trade measured in dollar values, said a top official of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) yesterday. 

The projection is that the global trade of apparel will drastically fall in 2023, said BGMEA President Faruque Hassan in an analysis posted for the BGMEA members.

As per the performance report of the months that have elapsed in 2023, sourcing by major markets has drastically gone down, he said.

Particularly, garment import by the US and European Union from around the world has declined by 22.92 percent and 8.84 percent respectively during the January-May period of 2023, he added.

"Bangladesh is also witnessing a slowdown in apparel export in the past few months," said Hassan.

"The global economic growth, and retail and trade outlook show a depressive picture, meaning that the slowdown in demand and order may continue the rest of the year," Hassan said in the WhatsApp message for the BGMEA members.

As per data of World Trade Organization (WTO), apparel trade worldwide has increased by 7.26 percent year-over-year in 2022 to reach $576 billion from $537 billion in 2021.

Bangladesh retains its position as the world's second-largest clothing exporting country after China and the country's share rose to 7.87 percent (as per the BGMEA whereas the WTO puts it at 7.9 percent) in 2022 from 6.37 percent (WTO 6.40 percent) in 2021.

Since 2016 Bangladesh has been maintaining a share of over 6 percent in the world apparel market and for the first time the share crossed the 7 percent mark last year.

During 2022, Bangladesh's apparel export to the world increased by 32.60 percent year-over-year to $45.35 billion from $34.20 billion, said Hassan.

Meanwhile, China's apparel export to the world grew by 3.60 percent year-over-year to $182.42 billion from $176.08 billion. However, China's share in the global trade fell to 31.67 percent in 2022 from 32.79 percent in 2021.

Vietnam ranked as the third largest exporter in the global apparel market with a 6.12 percent share followed by Turkey with a 3.46 percent share.

In 2022, Vietnam's apparel export to the world grew by 13.05 percent to $35.27 billion from $31.20 billion in 2021.

Turkey's clothing export to the world also reached $19.91 billion in 2022 from $18.73 billion in 2021, meaning a 6.27 percent growth.

In 2022, the difference in the market share occupied by Bangladesh and Vietnam has widened, said Hassan.

Europe is one of the significant apparel importers in the world as well as for Bangladesh, he said.

During the past five years, the value of the EU's apparel import from Bangladesh has grown by 9.42 percent, whereas their import from the world has shown an average annual growth of 4.31 percent.

In 2022, the EU's apparel imports from the world grew by 20.97 percent year-on-year. The EU's apparel imports from the world reached $103.09 billion in 2022 from $85.23 billion in 2021, which was $90.53 billion in 2018.

As per the data, the EU imported $22.89 billion worth of apparel from Bangladesh in 2022 which was $16.87 billion in 2021 and $16.44 billion in 2018.

With a 22.20 percent share in value terms, Bangladesh remains the second largest apparel import source for the EU after China.

In terms of quantity (measured in kilogrammes), the EU's clothing import from Bangladesh also increased by 21.20 percent year-on-year to $1.32 billion in 2022 from $1.09 billion in 2021.

China, being the top apparel import source for the EU and having a 29.24 percent share, registered a 17.01 percent year-on-year growth in 2022.

The EU's imports from China reached $30.14 billion in 2022 from $25.76 billion in 2021, which was $27.20 billion in 2018.

However, in terms of quantity, Bangladesh's share (28.90 percent) has crossed the share of China (28.46 percent) in 2022 and gained the top position for the very first time in the EU.

"In value terms we also hope to be the top apparel sourcing country for the EU by the end of 2023," he said.

Value-wise in 2018 the share of Bangladesh in EU's total apparel import was 18.16 percent, which climbed to 22.20 percent in 2022. In contrast, China's share has declined to 29.24 percent in 2022 from 30.15 percent in 2018.

With a 11.62 percent share, Turkey ranked as the third largest apparel import source for the EU which posted a 10.09 percent year-on-year growth in 2022.

The EU imported $11.98 billion worth of clothing from Turkey in 2022 which was $10.89 billion in 2021 and $9.92 billion in 2018.

In 2022, the EU's cumulative unit price of import from Bangladesh increased by 11.95 percent year-on-year to $17.27 from $15.42.

Therefore, both value and quantity-wise EU's import from Bangladesh saw 35.69 percent and 21.20 percent growths respectively leading this per unit price surge in 2022. It also proves that value addition is happening in Bangladesh.

China is slowly but gradually losing its global share, which is being gained by a few countries, including Bangladesh, Hassan said.

"We need to continue our efforts in enhancing efficiency, product development capability and invest in reducing carbon emission," he said, adding that it was not overoptimistic to hope for reaching 12 percent of the global apparel market share by 2030.