Mahfuz Emran: Garment export factories are compelled to cut back manufacturing because of numerous causes together with the continued power disaster. Alternatively, their export orders have decreased by 30 to 40 p.c. At the moment, their manufacturing value will increase from 20 to 33 p.c, however international patrons are providing costs as much as 20 p.c decrease than that. Consequently, many are unable to take orders.
In the meantime, merchants from Bangladesh’s garment rivals similar to India, Pakistan and Sri Lanka are keen to just accept work orders at decrease charges because of favorable trade charges of their native currencies and the flexibility to ship shipments rapidly. Consequently, patrons are giving export orders to those nations as a substitute of Bangladesh.
Bangladesh’s most important marketplace for garment exports is in western nations. The place winter is the height season for gross sales. The nation’s largest export sector fears a 7 p.c collapse in gross sales to western markets this peak season. And doing so at a time when the federal government has decreased the motivation price considerably. Furthermore, the revised export information additionally exhibits that exports have elevated by practically $11 billion within the earlier 10 months.
From this 12 months’s highest export trophy winners to pioneers in organising eco-friendly factories and pioneers in denim manufacturing are amongst those that are reeling from the uncertainty over this 12 months’s August-September order bookings.
Mesbah Uddin Khan, managing director of Windy Group, mentioned that patrons are providing 15 to twenty p.c decrease costs than the manufacturing value. He’s not in a position to take the work orders. Consequently, his enterprise is in a detrimental pattern.
Windy Group couldn’t affirm even 20 p.c of labor order for August-September interval of this 12 months. In the meantime, the time to get orders for the autumn vacation season is over – mentioned Mesbah, who acquired the gold medal from the Prime Minister for the very best export from the garment sector on Sunday.
Envoy Textiles is the world’s first LEED Platinum licensed denim manufacturing unit. Qutubuddin Ahmed, chairman of the group, mentioned that the textile mills are in a disadvantageous state of affairs whereas producing in line with the patrons’ costs. Typically we’ve to regulate costs, using spinning items to handle prices.
His manufacturing unit had a full order reserving for the month of April, however he didn’t know what would occur subsequent.
Syed M Tanveer, managing director of Pacific Denims, a pioneering denim export firm from Bangladesh, mentioned, “We’re additionally dealing with challenges in competing with patrons’ costs.” Exporters from Pakistan and Turkey are in an advantageous place by way of taking orders at decrease charges as their native currencies are extra depreciated than in Bangladesh.
Talked to greater than two dozen garment exporters. They reported a drop of as much as 40 p.c in export orders throughout August-September this 12 months in comparison with final 12 months. As the primary motive, it was not doable for many of them to take orders as worldwide vogue manufacturers and retailers supplied low costs to garment exporters. Some exporters have additionally skilled that the costs they’re keen to pay don’t cowl the price of manufacturing.
Mohammad Hatim, the proprietor of Narayanganj-based MK Knit Vogue, mentioned that regardless of the rise in manufacturing prices, nearly all patrons are decreasing the worth of garments by 12 to fifteen p.c. In some circumstances, they’re bidding lower than a 12 months in the past, so we’re in a nook.
He mentioned {that a} polo t-shirt offered for $4 a 12 months in the past, the identical purchaser who purchased the identical product is now asking $3.50. On this state of affairs, it’s higher to maintain the manufacturing unit operating at low capability than to take orders beneath value of manufacturing.
TAD Group Managing Director Ashiqur Rahman Tuhin mentioned patrons are providing charges as little as 15 p.c. Citing decrease demand within the western market, they’re citing decrease margins.
Exporters are blaming the lower in export orders because of the lower in gross sales margin in different European nations together with the UK and america of America and on the identical time having extra stock with the patrons.
In accordance with Eurostat information, attire imports in all main markets fell by 2 p.c in 2024. Alternatively, attire retail gross sales in main markets of the Western world additionally declined. In accordance with the US Bureau of Statistics, in comparison with the identical month in 2023 – in Could of this 12 months it fell by 1 p.c in america and by 3 p.c in the UK.
Shobhan Islam, managing director of Sparrow Group, mentioned that order placement is sluggish because of low demand in main markets, and patrons are additionally keen to pay decrease costs.
Explaining additional, he mentioned, because of the geopolitical tensions within the Pink Sea, the price of transporting items by ship has elevated, whereas the costs of fuel and electrical energy have additionally elevated, the wages of employees have elevated, and general manufacturing prices have additionally elevated. However, patrons should not bidding accordingly, so many of the factories should not in a position to take orders in line with their capability. He added that small and medium-sized factories are dealing with extra issues in reserving orders.
In accordance with Shovan, exporters from India and Sri Lanka are forward of us by way of providing decrease costs because of higher incentive services and favorable forex trade charges, which is why patrons are additionally shifting there.
Shobhan Islam can be a director of BGMEA, the apex group of Bangladesh’s ready-made garment producers and exporters. He additionally talked about the apprehension amongst patrons about getting export shipments from Bangladesh on time. That’s the reason some prime patrons are taking their orders to Vietnam, India and Sri Lanka.
