Last month, Bangladesh’s export earnings fell to a 13-month low of $3.9 billion. Why?
Experts say the slippage is not due to the country’s internal failure. Rather, the war in Ukraine and double-digit inflation in the eurozone are the culprits.
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The 27 countries of the European Union form the largest trading bloc for clothing products from Bangladesh, from where the South Asian nation derives most of its foreign currency.
Supply chain disruption caused by the war in Ukraine fueled electricity and natural gas prices in the EU, ultimately causing the 19 eurozone member states – part of the EU – were hit by record inflation of 10% in September.
Almost at the same time, the United States, which is Bangladesh’s largest RMG market as a country, reported that its average payment for consumer goods rose 8.3% year-on-year in August.
Thus, the two markets either reduced clothing orders or reduced the purchase of ready-made products, which led to a 5.66% drop in exports of woven fabrics from Bangladesh and a 9% drop in shipments of knits in September.
However, it is a matter of joy that overall exports and apparel shipments recorded an increase of more than 13% year-on-year in the last July-September quarter.
And now apparel makers are hoping the sector will rebound strongly from December as international buyers confirm their previously stalled orders.