Advantage Bangladesh-Underwear orders shift from China


23 November 2022, Mumbai:

Bangladesh reported on Wednesday that exports increased by more than 25% in July compared to last year. Manufacturers attribute the increase to a shift in orders from China to the low-cost South Asian nation. According to the Export Promotion Bureau (EPB), Bangladesh exported 1.82 billion dollars of goods in July, the first month of its fiscal year, the most significant amount ever.
According to Jalal Ahmed, the head of the EPB, this was caused by a substantial increase in apparel exports as businesses preferred to purchase from Bangladesh rather than China to reduce prices. According to him, their textile exporters are getting more orders from new markets that used to obtain their products from China.
Beyond Traditional Markets
Although Western Europe and the United States still make up about 90% of Bangladesh's export market, EPB numbers showed that shipments to new countries like Turkey, Japan, South Africa, and China increased by 200 percent. According to Ahmed, shipments of clothing increased by 25.5 percent overall and nearly 30 percent year over year. He also noted a significant increase in the exports of environmentally friendly jute, generally known as burlap, in the US and hessian in Europe.
Alternative Sourcing Markets to Replace China
According to industry insiders, the emergence of the deadly coronavirus has given Bangladesh's apparel exporters a new chance, as many international shops want to move their orders from China to Bangladesh.

Retailers who rely primarily on China, regarded as the world's workshop of factories, for the supply of their apparel/clothing and other fashion products are frantically searching for alternatives, including Bangladesh. But the genuine concern is whether Bangladesh can profit from this.
Because they import a lot of their raw materials from China, business owners in the apparel industry are not as optimistic about this. 
Twin effect of COVID-19 & changing geopolitical landscape

The spread of the coronavirus throughout China may present some chances for Bangladeshi exporters, according to MA Jabbar, general director of DBL Group, one of the top producers and exporters of garments in the nation. He continued, "We are already getting requests from Western buyers to make some room for more shipments.

The customers reportedly changed their purchases from China owing to the US-China trade war, because of the difficulties in manufacturing caused by Covid-19. These assertions were supported by a Bangladesh Bank report, which noted that while export relocation growth was weak in June 2021, it picked up in September. In light of the ongoing pandemic, apparel shipments in December 2021 were even more positive.
A quick perspective

Bangladesh’s earnings from underwear shipments have grown 31 percent year on year. Export earnings from underwear accounted for six percent of the garments exported last fiscal year. The underwear sector in Bangladesh is directly benefitting from the shift of work orders from China and Sri Lanka and growing silently over the last few years.

Currently, underwear is the fifth most exported category from Bangladesh. It is a glowing example of the diversification of garment products in recent years.
Only a few factories used to produce underwear for some select international retailers and brands as this was not a regular export product for the country.
Now more than 500 factories are regularly producing underwear as demand for domestically made items is growing in the west for their competitive prices. Usually, prices of underwear, such as lingerie, are higher than prices for other attire as specialized fabrics are required for their manufacture.
Shift is real
Recent research by Bangladesh Bank now supports the long-standing contention made by apparel exporters that foreign purchasers have moved their orders from China to Bangladesh. A pattern of purchase orders moving from rival nations to Bangladesh has been seen, according to a report released by the central bank's External Economics Branch.
According to exporters, the rate of order relocation to Bangladesh has dramatically increased recently. The importers claim that in addition to moving their orders from China to Bangladesh, they did the same for Vietnam, Cambodia, and other nations.
Following the easing of the global lockdown, the exporting nations' storefronts reopened, and purchasers gradually started moving their orders to Bangladesh. However, to preserve growth, the central bank also advised taking into urgent consideration problems like the price of raw materials like cotton and yarn, unexpected transportation costs, and cancellation of purchase contracts.
How things stand; Over the last decade, Bangladesh has been enjoying the benefits of a shift in work orders from China and some other countries in many product categories.
This has come about as the cost of production in China has gone through the roof while there prevails a dearth of skilled workers in the apparel sector. Workers in China are preferring working with sophisticated technologies in the apparel/garment sector.

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