Bangladesh Faces Acute Infrastructure Shortage To Sustain Apparel Exports

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Notwithstanding lukewarm demand and a general slowdown in growth of exports, Bangladesh managed to register a rise in its share of global clothing export in the year 2016.  In fact, Bangladesh stood as the second largest exporter of apparel products during the year.

Supporting figures and statistics emanated from the recently released World Trade Statistical Review 2017. According to the data made available, “The country’s global market share in apparels registered a rise of 6.4 per cent in 2016. This indicates an incremental rise of 0.5 per cent over the previous year’s growth.

The review report was released by the World Trade Organization (WTO) indicating that Bangladesh has at its command a large untapped potential or in other words a good opportunity to turn a leader in exports when it comes to the RMG sector in the near future. However, this opportunity is also riddled with challenges that the textile manufacturers in Bangladesh have to overcome pointed out industry observers.

According to the observers from Bangladesh Garment Manufacturers and Exporters Association (BGMEA) “Our having registered a continuous growth is a positive sign. Despite this, we have no room for complacence as we have to answer crucial questions like how much profits we have made, and if at all we have made a profit.”

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The matter that immediately propels this skepticism from BGMEA is that the textile sector in Bangladesh has registered a negative growth in the first six months of 2017. “This indicates that our country’s market share will take a dip in the current year,” explained the BGMEA spokesperson.

According to observers from BGMEA, “This lack of growth in the first half of 2017 can be attributed to the fall in prices globally.” In the first half of 2017, export earnings from textile apparel for Bangladesh has risen by a meager 0.20% to 28.15 billion USD. “This is not a healthy sign as apparel exports are the lifeblood of Bangladesh’s revenue inflow and the growth figure indicated is the lowest in the last 15 years,” summed up the BGMEA.

Taking a global perspective, the manufacturers’ body explained, “The world market for apparels dipped to USD 444 billion in 2016 from USD 450 billion in 2015. Despite this dip, and other odds, China is the top exporter of apparel products with its share standing at USD 161 billion. The silver lining for Bangladesh in this is that China’s market share dropped to 36.4% from the previous year’s 39.3%.”

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The BGMEA team informed that the shift in balance from China spelt a great opportunity for Bangladesh. However, currently the market potential lies untapped. “Our market share shot up as China lost significant stake in the global markets. To capitalize on this situation we should be in a position to to retain our competitive edge,” said the BGMEA spokesperson.

Pointing out the pitfall he said, “There is a significant increase in the congestion that results in Chittagong Port due to increasing pressure on infrastructure. This has resulted in our exporters not being in a position to fulfill work orders.”

“To circumvent this situation our government has to focus on infrastructural requirements that will amply support our textile consignment exports if we are to take advantage of the shift in global demand for Chinese apparel,” he said.

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Vietnam, a close competitor to Bangladesh is gradually closing in on the market share percentages. Currently it has registered an increase of 0.7 percent compared to the previous year. Its market share stands at 5.5%. For the other competitor India, there was a slight downward spiral from 4.1% to 4%.

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