Table-1: RMG Export Values in million$
|2022 (Jan-Feb)||2023 (Jan-Feb)||Growth Rate|
Bangladesh exported 8368.21 million$ valued RMG to the world in the period of Jan-Feb, 2023 which was 7596.3 million$ in the same period last year, registering a 10.12% growth. However, we see a negative growth in the North American market and Russia. The export decline to Russia is conceivable due to the political tension prevailing there and due to the war with Ukraine. However, the export decline to both the North American market, USA and Canada is a concern. Inflations in North America has been a concern in the last couple of years after the Covid, and news state that the USA will continue increasing their bank interest rates to lessen the effect of inflation in the consumer market. This implies, the economy in the USA would continue to be on the slower side and imports of clothing may continue to decline. However, a statement from McKinsey & Co. assures that the economy should return to full swing soon. Another reason behind the low exports of RMG to the US and Canada is due to the winter season. This year winter in many states of the US including New York and California was so severe, many people were completely homebound. Exports to the EU along with the UK are on the rising side.
On the other hand, exports to non-traditional markets like Japan, India, Australia, Korea and Turkey are at a satisfactory level. Most of the non-traditional markets being themselves RMG-producing countries are still importing from Bangladesh, which indicates the high demand for ‘made in Bangladesh’ products.
|Table-2: Exports to USA comparison with Unit Price per Square Meter Equivalent (SME) All values in million$|
|2022 Jan||2023 Jan||2022 Jan||2023 Jan||2022 Jan||2023 Jan|
Another interesting analysis can be drawn from Table-2 that depicts the exports to USA only in January period of 2022 and 2023 FY and also compares the unit price for every square meter equivalent of product. We can see that though the export volume has increased from 751.57 to 867.64 million$, in terms of square meter equivalent it decreased from 282.23 to 266.42 million$. It implies the unit price for every square meter equivalent of garments has increased from 2.66$ to 3.26$ in one year, which is a good sign. If we compare the unit price per SME with the other countries it shows that the USA pays to China far less than Bangladesh. This is an evidence of value addition by the Bangladesh textile and garments industry. However, we are still behind Vietnam, India and Indonesia who are getting more than 4$ per SME. Vietnam is the second largest exporter to USA after China but India and Indonesia are still lagging in volume of exports. Bangladesh is still little bit cheaper than the world average with is 3.37$ currently. A high unit price would enable more wealth creation through less resource usage and more money retention.
Data Source: Otexa and BGMEA website