Bangladesh has seen an increase in garment exports to European Union (EU) markets and achieved the highest growth among garment exports to these European markets. However, China is the largest exporter of this market, followed by Bangladesh. These data appear in a report published by Eurostat, the European statistical agency.
Chart: Bangladesh has seen an increase in garment exports to European Union (EU) markets and achieved the highest growth among garment exports to these European markets.
From January to November 2022, a total of US$95.17 billion worth of products were exported to the European market. Among them, Bangladesh-made clothing products were exported to the European market worth 21.18 billion US dollars, and China exported 27.97 billion US dollars. According to Eurostat, buyers from Europe still favor Bangladesh, which can be achieved by increasing the number of green factories in Bangladesh.
Data show that from January to November 2022, EU clothing imports increased by 22.39% compared with the same period in 2021. During this period, the EU imported $21.18 billion worth of clothing from Bangladesh, up from $15.3 billion in 2021. Garment exports to Europe increased by 38.39% during the year.
According to the report, China's clothing exports, which ranked first, increased by 19.29%. Turkey is also the third largest source of clothing in the EU. The country's garment exports increased by 11.56%.
In the first 11 months of 2022, imports from Cambodia increased by 35.89%, Vietnam by 34.16%, Pakistan by 27.99%, Indonesia by 27.80%, Sri Lanka by 17.32%, and Morocco by 8.13%.
Bangladesh's vast garment industry is seeking to grab China's crown as China's largest garment exporter to the European Union as the conflict in Ukraine and other global geopolitical tensions lead to shifting supply chains, leading to an increase in orders to densely populated South Asian countries.
Increased exports to Europe will boost a significant part of Bangladesh's economy, with ready-to-wear (RMG) manufacturers already contributing about one-fifth of the country's GDP and more than 80% of export earnings.
Bangladesh's garment exports to the EU increased by nearly 42% year-on-year to US$19.4 billion in the first nine months of 2022, according to the latest data from Eurostat, while shipments from China increased by about 22% to US$25.5 billion, Eurostat.
"Due to the recent trade war between China and the United States, many work orders have been transferred from China to Bangladesh," Shahidullah Azim, vice chairman of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Nikkei Asia. Rising tensions between Washington and Beijing have prompted many brands to seek non-Chinese suppliers in areas such as clothing and textiles, consumer electronics and smartphones.
Major EU buyers of Bangladeshi garments include fashion chains H&M, Primark, Zara, G-Star Raw and Marks & Spencer.
Strong garment exports are crucial for Bangladesh as it grapples with dwindling foreign exchange reserves, and the country's economy has eased somewhat despite a $4.7 billion loan program approved by the IMF's board earlier this year.
With a population of nearly 170 million and a sizeable labour potential, Bangladesh is one of some 45 developing countries that currently enjoy duty-free and quota-free access to all EU markets, except arms and ammunition. In contrast, Chinese exporters must pay tariffs.
"Buyers prefer Bangladesh because of its tariff-free export facilities to the EU market," said Ashikur Rahman Tukin, managing director of TAD Group, which produces a range of products including clothing. All the garments it produces are sold to Europe.
Producers in Bangladesh have also moved away from so-called fast fashion — disposable clothing mass-produced to accommodate rapidly changing consumer tastes — to higher-quality, more profitable clothing.
"Bangladesh is shifting its production base from basic products to high-end, value-added clothing products, which is also helping the country increase its share of the EU market [the growing demand for such products]," said Azim, from the brand. BGMEA。
However, Bangladeshi garment exporters face hurdles as they expand further into Europe. From 2026, the country will no longer be classified as a so-called Least Developed Country (LDC) under UN guidelines, at which point it will no longer be eligible to enjoy many of its current EU trade advantages. However, the country is negotiating whether it qualifies for membership in the EU's Generalized System of Preferences Plus (GSP-plus) scheme, which will allow it to retain some trade privileges.
"We will perform better after graduating from LDCs in the country and Bangladesh is expected to receive GSP-plus privileges in the EU bloc," said TAR's Rahman.
Meanwhile, Paul Marchant, chief executive of Britain's Primark, said during a visit to Bangladesh's capital Dhaka last month that his company plans to increase sourcing from the country.
Bangladesh's garment industry was plunged into tragedy about a decade ago when an eight-story garment factory building in Dhaka collapsed, killing more than 1,100 people, while a fire broke out at another factory just a few months ago that killed 112 people. Since then, authorities have been working to improve safety coordination, and Western buyer groups have been demanding that companies use more sustainable production methods.
Mohiuddin Rubel, director of BGMEA, said: "The country's garment industry operates according to standards related to environmental safety, water and energy conservation, and worker welfare. ”
The country's producers and others are confident that it will soon become Europe's largest exporter. "In the EU market, Bangladesh is close to China, so we can surpass it in four to five years," said Asan Mansour, executive director of the Bangladesh Policy Institute.
"China's ready-to-wear market share is declining globally. I don't think China has a strategic interest in protecting that share because the country is now focused on developing and producing higher-value goods like electric vehicles. As a result, they are not as focused on the apparel industry as they used to be. ”
Source: Global Textile Industry Information Network, Study Room, Network
Editor: China Yarn Network New Media Team
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