Bangladesh : Apparel exports to US drop

Garment shipment to the US, the country's single largest export destination, declined 7.47 percent year-on-year to $5.2 billion in 2016-17 largely because of higher duty, longer lead-time, and lower prices.

Apparel exporters also blamed the appreciation of the local currency, less imports by US retailers and inefficient port operations in Bangladesh, for the fall in garment exports.

Exporters say Bangladesh's garments are less attractive to US customers as competing countries can offer similar items at lower prices since they enjoy preferential duty privilege.

Bangladeshi apparel exports face 15.62 percent duty to the US markets, whereas Vietnam, Turkey, China and India are subjected to 8.38 percent, 3.57 percent, 3 percent and 2.29 percent duty respectively. Longer lead-time is another major problem confronting Bangladesh whereas competitors can send to the US within a shorter time.

Bangladesh takes nearly three months to export to the US whereas competitors can supply the same products to the US within 60 days or less.

Previously, international retailers and brands used to place work orders with Bangladeshi manufacturers with a six-month lead-time, but now it has gone down to two to three months due to the 'fast fashion' in the Western world.

Fast fashion is a contemporary term used by fashion retailers to capture current fashion trends.

Bangladesh needs to import raw materials such as cotton and spin them locally before making the finished products. A lack of adequate skilled workforce is another drawback.

The country's garment sector was hit with 15 percent price cut in the last two years, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

 “We are also facing troubles at the airport and the Chittagong port,” said Faruque Hassan, vice-president of the BGMEA. “It takes four or five days to get the samples out of the airport whereas we need the samples within a day,” he said.

Similarly, the situation at the Chittagong port worsened because of container congestion. The country's premier port cannot release imported goods to garment makers even in two weeks, according to Hassan.

 

 

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