Woven garment export makes a strong comeback
The stunning rebound of woven garment export after one and a half years helped lift merchandise shipment from Bangladesh in the just-concluded year, helped by rising demand and inflow of increased orders.
With the improvement of the Covid-19 scenario worldwide, which prompted people to return to work and take part in formal events, the woven shipment began recovering from August after going through more than 10 per cent negative growth months after months for 18 months.
In August, woven exporters fetched $1.15 billion, registering 4.48 per cent year-on-year growth.
December's receipts were even better as Bangladesh broke records after bringing home $1.86 billion, the highest in a single month and up 48.17 per cent year-on-year, according to data from the Export Promotion Bureau yesterday.
What is more, woven shipment grew to $8.74 billion in the second half of 2021, an increase of 24.50 per cent compared to the same period a year ago.
Desh Garments, the country's oldest garment factory, which mainly ships woven shirts, had nearly 75 per cent of its business non-existent up to June last year since the beginning of Covid-19 in 2020 as international retailers and brands were not placing adequate orders as demand plummeted.
The shipment started picking up gradually from June with the reopening of the economies worldwide. And at the end of 2021, the export receipts of the company from the shipment of woven shirts witnessed 60 per cent growth.
"The prospect for 2022 is bright as buyers are placing orders with local manufacturers in higher numbers," said Vidiya Amrit Khan, deputy managing director of Desh Garments.
Shahidullah Azim, managing director of Classic Fashion, which makes woven shirts and trousers, says international retailers and brands are placing a lot of work orders for woven items.
However, since the local weavers can supply only 40 per cent raw materials for woven garments, manufacturers have to rely on Chinese suppliers for the rest of the fabrics.
"Any disruption to Chinese supply chain may severely affect Bangladesh's garment shipment. So, local garment manufacturers need to strengthen their capacity in the woven sector."
Khan is a bit worried about the spread of the new variant of Covid-19, Omicron, in her main export destinations in Europe and the US, also the two main overseas markets of Bangladesh.
She is also not happy with European and US buyers' demanding discounts on the excuse of fallouts of Covid-19.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, is hopeful about the continuation of the current pace of exports.
"Work orders were not cancelled or suspended because of Omicron yet, but still it is a matter of worries for us as European and American buyers, retailers and brands may shut their outlets if the situation worsens."
Another challenge is abnormal hike of freight charge, which increased as high as 500 per cent.
"If the freight charge does not come down, garment manufacturers' profit margin will fall further," Hassan said.
The price of raw materials such as yarn surged in 2021, affecting the garment shipment.
"The higher raw material prices and the abnormal freight charge may hurt the garment shipment in 2022 as well," Hassan warned.
Knitwear export maintained more than 15 per cent growth during the peak of Covid-19 as people were confined to homes in many countries because of stay-at-home orders.
Fazlul Hoque, managing director of Plummy Fashions Ltd, one of the greenest garment factories in the world that mainly produces knitwear items, witnessed 30 per cent growth in 2021 compared to 2020 as the international retailers and brands placed more work orders in his factory.
"I am expecting the growth to continue in 2022 as I have bagged more work orders from my buyers," he said.