Apparel exports to US fall 21.77% in Jan-Aug

Bangladesh's apparel exports to the US shrank 21.77% in the first eight months of 2023 as the key market is going through an overall slowdown in demand for garment products.

The country's apparel shipments to the US were valued at $5.18 billion in the first eight months of this year against $6.62billion in the corresponding period of last year, according to the US Department of Commerce's Office of Textiles and Apparel (OTEXA).

Meanwhile, remittance earnings from the US also dropped 48.8% to $511.69 million in the first quarter (July-September) of the 2023-24 fiscal from $999.77 million in the same period of the previous fiscal, according to the Bangladesh Bank.

The overall apparel demand in the US is witnessing a downturn due to an economic slowdown induced by the ongoing Russia-Ukraine war, exporters said. 

However, they said the US market retains a good position for Bangladeshi apparel compared to other export destinations and expected better figures by the end of the year. 

The OTEXA data show that the overall US apparel imports declined from $69.21 billion to $53.45 billion in the first eight months of 2023 – a 22.77% decline.

In terms of quantity, US apparel imports declined from 22.53 billion units to 16.49 billion units in the same period – a 26.80% decline.

Bangladesh's apparel exports saw positive growth in January and July from $751 million to $866 million and $694 million to $746 million respectively, while other months saw a decline in this year.  

In terms of quantity, Bangladesh's apparel exports saw a 29.10% negative growth to 1.58 billion units, which was 2.23 billion units between January to August last year.  

According to OTEXA, the world's top apparel exporter China's garment shipments to the US dropped by 29.47% to $10.98 billion in the eight-month period.

Vietnam, the second largest apparel exporter to the market, also saw its apparel exports drop by 24.57% to $9.06 billion. 

Besides, Indian and Indonesian apparel shipments to the US fell by 21.6% and 26.10% to $3.26 billion and $2.89 billion respectively. 

BGMEA President Faruque Hassan told The Business Standard, "The US consumers are facing high interest rates due to inflation, and their buying capacity is affected by the soaring mortgage rates."

"Bangladesh may miss its export target for the current fiscal year due to some challenges, but it will be able to maintain a better position than other competing countries by the end of the year as now the country is producing some high-value items, which are given an advantage to maintain overall growth," he said.

Faruque Hassan also hoped that the US market may come back to a positive trend as most of their stores have already cleared their inventory, and they may place orders for coming days.

Apparel exports to the US reached $9.75 billion

Bangladesh saw big drops in remittance earnings 

According to the Bangladesh Bank data, inward remittances dropped to $1.34 billion in September, the lowest in 41 months.

The slides in exports and remittances are raising concerns among stakeholders regarding the mounting pressure on the country's balance of payments.

This alarming trend in the two main sources of the country's external earnings puts fresh strain on the nation's foreign exchange reserves and could potentially trigger a depreciation of the taka against the US dollar.

Bangladesh's foreign exchange reserves continue to slide and stood at $21.15 billion as of 26 September in line with the IMF reserve calculation method, according to central bank data.