Bangladesh’s Apparel Exports to USA: Challenges in 2023

Introduction:

In 2023, Bangladesh experienced a significant setback with a notable 25% decline in apparel exports to its major trading partner, the United States, totaling a loss of $7.29 billion. This downturn is directly linked to the mounting inflationary pressures stemming from the ongoing Russia-Ukraine conflict. Additionally, disruptions in the Suez Canal caused by Houthi attacks on shipping cargos in the Mediterranean Sea further exacerbated the challenges faced by Bangladesh’s export sector

Comparative Analysis:

Comparatively, the US Department of Commerce’s Office of Textiles and Apparel (Otexa) reported a figure of $9.72 billion for Bangladesh’s apparel exports to the US in 2022. The overall data highlighted a 22.04% year-on-year decrease in the country’s total apparel imports, plummeting from $99.86 billion to $77.84 billion.

Volume Decline in RMG Exports to USA:

In terms of volume, the export of Ready-Made Garments (RMG) from Bangladesh to the USA also experienced a sharp decline of about 28% in 2023. This figure dropped from 3.13 billion square meters in 2022 to 2.25 billion square meters, as per Otexa data.

Insights from Faruque Hassan:

Faruque Hassan, the President of the Bangladesh Garment Manufacturers and Exporters Association, shared insights with The Business Standard, emphasizing the global apparel market’s volatility in 2023. The impacts of high inflation, driven by the Russia-Ukraine conflict, led to reduced imports by countries worldwide, including the significant apparel importer, the US.

Global Challenges and Shared Setbacks:

Hassan noted that the decline in apparel exports to the US was not unique to Bangladesh, as every exporting nation faced similar challenges in 2023. Despite this setback, he expressed optimism about the market’s improvement in the future. He highlighted the potential stabilization of US inflation and interest rates, anticipating a rebound in the market in the upcoming months.

Market Share and Position in USA export:

While Bangladesh’s share of apparel in the US market was 10% in 2022, it dipped slightly to 9.37% in the following year. Nevertheless, Bangladesh maintained its position as the third-largest apparel exporter to the US, trailing behind China and Vietnam with 20.96% and 18.21% shares, respectively.

Regional Trends:

Otexa’s data further revealed that in 2023, Chinese apparel exports to the USA experienced a 10.83% decrease to $16.32 billion from the previous year’s $21.75 billion. Similarly, Vietnam and India witnessed a decline of 22.29% and 21.42%, respectively, in their apparel exports to the US. Meanwhile, Indonesia and Cambodia faced a 25.19% and 23.58% drop in their respective apparel exports to the United States during the same period.