Bangladesh Export Performance 2023-24 H1

TOTAL EXPORT:

• December 2023 export declined by -1.06% yoy to $5.30 billion.
• This is highest in this FY in terms of single-month earnings in 2023 but -5.57% lower than the target.
• July-December export down by -0.48% to $27.56 billion which is -8.4% down than the target of $30.11 billion
• This is driven lower global demand for apparel products, including the United States and the European Union
• Moreover, during the labour unrest in end Oct, several big players in the export industry were bound to close their factories to avoid vandalism, which also impacted the overall export earnings.
• Bangladesh earned $55.56 billion in export earnings in FY23, posting a narrow +6.67% yoy growth.

?APPAREL EXPORT:

• July-December export was +1.72% to $23.39 billion. Woven - 4.12% to $9.91 billion but knitwear +6.48% to $13.48
• USA export down by -24.7% to $6.35 billion but non-traditional markets and in flow of high value heavy and outerwear products from China only offset the down from USA and EU, also raised the total export.
• In calendar year 2023, Apparel export was $47.39 billion, +3.67% .Considering the global economic and geo-political crisis, Bangladesh did fairly well.
• In the beginning we were able to cover some of this negative growth with value, while the quantity was decreasing but the value was increasing. But now the value has also started going negative due to which our growth has been negative for the last 3 months.
• The low inflow of work orders and inadequate gas pressure meant industry owners could not run their factories at full capacity.
• Higher costs of production due to increased prices of raw materials, transport cost, the volatile exchange rate of the local currency against the US dollar, and the government's restriction on imports in order to save US dollars were other reasons for the slowdown in investment in the sector.
• In 2022, the global garment export was worth $576 billion, shrinking from more than $700 billion.
• The export of garment items globally was even lower than $576 billion in 2023.

?IMPACT OF APPAREL EXPORT SLOW DOWN:

• In 2022, nearly 50 new units came into operation in the knitwear sector, but in 2023, that number was reduced to less than 10
• The knitwear sector also witnessed some very required expansion which was mandatory for the exporters. Otherwise, the sector saw dry investment,.
• The textile and garment sector witnessed a very dry investment season in 2023 as demand for clothing items fell globally.
• The worst-hit sector was primary textile sector, worth nearly $25 billion, as it witnessed almost zero investment in 2023, with no new units being established.
• Even in 2022, the year Russia Ukraine issue started, 14 new units were established in the primary textile sector, mainly in non-cotton fibre production.
• Import of four core raw materials for the primary textile sector, including capital machinery, fabrics, yarn and cotton, declined by 28 % yoy in 2023.
• Very few textile millers expanded their capacity despite it being very much required.
• A similar slowdown in investment was also seen in the garment sector, worth more than $30 billion, in the past year

OTHER MAJOR PRODUCTS (Home Textile, leather, footwear and agriculture)

• Home textile export -38.48% to $369.91 million
• Leather and leather goods -17.93% $523.03 million
• Leather-footwear -32.72% to $257.90 million while other leather products fetched $197.76 million with a +4.15% yoy
• Agriculture products +2.28% to $507.93 million
• Jute and jute goods -10.24% to $436.12 million.
• Frozen and live fish in -12.68% to $215.13 million while shrimp export - 20.37% to $145.91million

?2024 OUTLOOK????????????????????

• 2024 will be a year of turnaround as there are some indications that consumption and spending may rebound.
• Economic turnaround in the West with inflation in Europe and the US coming down, hopefully exports will also have a turnaround.
• Since the growth curve of global clothing trade falters every year, 2024 may be the year of turnaround.
• Despite all the challenges the industry continued, its commitment and efforts toward sustainability like the declaration of minimum wage and the transformation of green industrialization will continue. Number of LEED sites is now 206, 500+ in pipeline.
• Situation is expected to improve from the second half of this year as the global economic situation is improving, evidenced by the easing of the interest rate by the US Federal Reserve and major banks in the European countries.
• A certain degree of uncertainties in the international economic and geopolitical climate will continue, including?supply chain disruptions?and inflation, as key challenges.
• Internal economy, such as a decline in foreign exchange reserves and the task of taming inflation sounds as concern, but big projects and infrastructure have started giving returns to economy.
• Downturn to USA and EU was counterbalanced by a surge in non-traditional markets and in flow of high value heavy and outerwear products from China.
• Suppliers own design creation strengths continuously growing, all major suppliers are having design set up in country and in retail country. This is directly contributing growth of export.
• We cannot deny the resilience of Bangladesh’s RMG sector, ?it has been proven in 20233 and 2023H2.

Sources: BGMEA, BTMA, BKMEA, Various