Bangladesh’s garment exports have seen good growth at the end of the year. Inflationary pressures in the Western world are slowly easing which enables consumers to spend more on clothing items. Christmas sales were also buoyant, with international retailers and brands selling off their billions of dollars of old stocks.

Holiday shoppers are showing resilience, and retailers are offering great products and experiences at the right price levels to help stretch household budgets. Consumers are returning to in-store shopping for a more traditional holiday shopping experience.

International apparel retailers and brands have started bringing in new work orders for Bangladesh’s garment factories, prompting inquiries for future purchases. All in all, apparel suppliers expect a moderate recovery in exports in the coming year. In November 2022 Bangladesh’s apparel exports were 35 per cent higher than the same period last year. As a part of the post-Covid recovery, Bangladesh’s entrepreneurs have been able to increase their exports. However, they don’t expect the recovery in apparel shipments to be strong. It is expected to be moderate and the real recovery is expected to start from March onwards. There is still uncertainty about when the war will end and many issues are yet to be resolved, which could affect global trade.

A growing demand for carpets and rugs in the commercial and residential sectors drives the polyester fiber market.

An increase in nonwoven materials and products, along with growing urbanization and home décor industries, are expected to drive the polyester fiber industry to grow.

A growing preference for polyester fiber over cotton is expected to help boost the market, due to its abrasion resistance, strength, and anti-wrinkle properties as well as its increased abrasion resistance. A wide range of industries, such as automobiles, electronics, and hospitality, is expected to contribute to the market’s growth.In addition, polyester is also used to make ropes and yarns that are used in safety belts, conveyor belts, tapes, tire reinforcements, and plastic reinforcements due to its high strength and tenacity. There will also be a positive effect on the market from the thriving demand for polyester fibers from industries like hospitality, automotive, electronics, household, and manufacturing.

Further, a rise in the mattress market in the coming years is likely to further strengthen the demand for polyester fibers.To achieve a substantial market share in the worldwide polyester fiber market and strengthen their position, manufacturers are pursuing expansion methods such as current developments, mergers and acquisitions, product innovations, collaborations, and partnerships, joint ventures.

Telangana is establishing India’s biggest textile park in a textile park and this is attracting investments from national and international companies. Telangana is strengthening the handloom sector as well in the state. The powerloom sector in Sircilla has over 25,000 machines. The state plans to strengthen the value chain, modernize power looms in Sircilla, improve the market, skill development, capacity building and project monitoring.

There are over 40,000 handloom weavers in various parts of Telangana, with most of them in Yadadri Bhuvanagiri, Gadwal, Warangal, Rajanna Sircilla and Karimnagar. Telangana’s unique textile crafts have been listed by Unesco. These include Siddipet Gollabhama saris, Himru weaving and Gongadi sheep wool blankets. Unesco has listed the histories and legends behind the textiles, especially the strenuous efforts put in by weavers.

A lot of effort has gone into identification and collating a representative sample of Indian textile crafts from across the country that merit special consideration. Siddipet Gollabhama saris have motifs woven on the pallu (the loose end draped over the shoulder) and on the lower border but none on the upper border. The body of the sari is plain or has motifs. These saris are made of cotton. Another important feature of Gollabama saris is that the motifs are not woven on the loom but made entirely by hand.

An expected global recession in the second half of FY23 is now top of the mind for business communities around the world. Just when the global economy was recovering from the pandemic, the Russian-Ukraine war led to further economic instability disrupting supply chains, increasing prices of all commodities including apparel and creating geopolitical tensions. And a new Covid surge in China with strict lockdowns has impacted global economy even further.

Growth decline a cause of concern

The IMF which works to achieve sustainable growth and prosperity for all its 190 member countries recently released its global economic outlook survey which has projected a 2022 global GDP growth to reach 3.2 per cent as compared to 6 per cent last year. Although this indicates a decline in growth rate by 46 per cent from 2021, it is set to further decline by 16 per cent to reach 2.7 per cent in 2023. Growth projection of advanced economies has seen a decline of 5.2 per cent last year to 2.4 per cent in 2022 and 1.1 per cent in 2023 which translates to a drop of 53.8 per cent in 2022 from 2021 and 54 per cent in 2023 from 2022.

With the strongest-ever tightening in history as governments withdraw Covid restrictions and raise interest rates to control persistent multi-decadal high inflation globally, a series of hikes in rates of various commodities has led to an economic slowdown for all countries. In the last year, Fed funds rate has seen the biggest change ever since 1981 in the ECB target rate since the Eurozone was created along with the largest tightening of global central bank policy since 1980.

Globally, things are not looking good and the light at the end of the tunnel is still rather dim. In 2023, slow growth will force a down-turn in the US if core inflation persists; Europe is going into a recession driven by an escalation in energy prices while China reels under a new Covid wave and delays the reopening of many segments.

Closer home, Sri Lanka’s monthly export in October 2022 also fell for the first time in seven months as global demand for industrial products led by the garment segment has sharply declined when global recession looms ahead.

Analysts hopeful about India

Almost all emerging markets and developing economies’ outlook are facing a post-pandemic downward slide and this is reflected in the Indian economy too. In October 2022, India’s exports of non-oil goods were at $25 billion which translates to -18 per cent lower than last year and 28 per cent lower than the highest monthly goods exports of $34.7 billion. Although the service sector exports sum up over 50 per cent of gross value added with the manufacturing sector contributing less than 20 per cent the disruptions in the global supply chain will significantly affect manufacturing industry much more than the general impact on the domestic economy. Experts say, exports are less than a fifth of the domestic economy, so while factoring in the reduced export figures, India’s GDP will continue within the fastest-growing emerging countries with a growth rate of 6.8 per cent in FY23.

Summing it up well is a recent World Bank report titled ‘Navigating the Storm’ which says that “India’s economy is relatively more insulated from global spillovers than other emerging markets. India is less exposed to international trade flows and relies on its large domestic market. India’s external position has also improved considerably over the last decade.” Analysts remain hopeful while the pull-down external economic environment will negatively affect India’s growth prospects, the present economy is better than the other emerging markets to weather the storm better and use global spill-overs to its advantage.

Cotton output in northwest China's Xinjiang Uygur Autonomous Region topped 5.39 million tons in 2022, up 2,62,000 tons over the previous year. The autonomous region contributed 90.2 per cent of the country's total cotton output this year. The cotton planting area in Xinjiang edged down in 2022 to around 2.5 million hectares, accounting for 83.2 per cent of the national planting area. The cotton yield in Xinjiang averaged 143.9 kg per mu in 2022, an increase of 7.5 kg per mu over the previous year.

Xinjiang has ranked first in China for 28 consecutive years in terms of total cotton output, per unit yield, planting area, and commodity allocation. Xinjiang has seen mechanized and intelligent cotton planting in recent years, with machines doing over 80 per cent of the picking work.

Since the 1990s, Xinjiang has gradually become the largest cotton production base in China and an important producer of the crop throughout the world. Nearly half of the local farmers are engaged in cotton production. The use of cotton made in China’s Xinjiang Uyghur autonomous region has been facing criticism in the wake of allegations of forced labor. It is difficult to rule on the legality of the entire process of manufacturing cotton products, which involves a number of stages, including cotton cultivation, spinning and sewing.

Prices of raw cotton in India are currently at least 10 to 14 per cent higher than prices in international markets. This disparity is impacting Indian textile industry. Demand slowdown in export markets is another cause of worry for Indian industry, especially textile and apparel exporters.

The industry is therefore looking for proactive support so it can face the twin challenge in the global market. It wants the 11 per cent import duty imposed on cotton to be removed in order to create a level playing field for the domestic industry. Indian cotton is costlier than international cotton, including the Chinese fiber.

Besides this, the industry is also seeking a stimulus package to support the spinning, weaving, fabricating, garmenting and home textiles sectors. In view of the firm trend in prices, which are 20 per cent higher than global rates, the natural fiber consumption will likely be lower. Indian cotton consumption is expected to decline by nearly 27 lakh bales. Arrivals are low as farmers are holding back the produce. Over 125 lakh bales of cotton have been harvested. But hardly 50 per cent of the harvested crop has arrived in the markets. Farmers want prices like last year.

China’s garment exports fell by 14 per cent year on year in November 2022. Though the exports of garments declined in November 2022; the cumulative export values from January 2022 to November 2022 (Year to Date) increased by five per cent year on year.

China shipped $ 141.80 billion worth of garments in the first eleven-month period of 2022, as compared to the $ 134 billion shipment values during the same period in the corresponding year. As far as textile exports are concerned, China shipped $ 136.87 billion worth of yarns, fabrics and other textile products from January 2022 to November 2022, outnumbering last year figures of $ 130.94 billion.The increase in textile and apparel shipment was recorded despite the prevailing Covid situation in China. Till October, the demand for apparel and textile products in 2022, kept factories up and running across China.

China is in the middle of an outward shift of its low-end textile and apparel industry, and this is expected to continue in the future.China's garment industry registered steady expansion in terms of revenue, profits and exports in the first nine months of this year. The industry’s revenue was up two percent year on year. Profit was up 1.8 percent over one year ago.

Apparel suppliers in Bangladesh are expecting a moderate recovery in exports in the upcoming year.

This optimism is based on the fact that sales in the western world are gradually gaining pace with a new normal arising from the Russia-Ukraine war and the falling prices of petroleum products.This in turn is causing inflationary pressure in the western world to subside gradually, effectively leaving more money in the pockets of the consumers, enabling them to start spending on the purchase of clothing items.Christmas sales were also upbeat, with old stockpiles of clothing of international retailers and brands worth billions of US dollars being sold off.

This has prompted international clothing retailers and brands to start coming up with new work orders for factories and make inquiries for future purchases.However, Bangladesh’s exporters don’t expect a strong recovery in apparel shipments. The real recovery is expected to start from only March onwards. Uncertainty still prevails over when the war will come to an end and many issues have not been resolved yet, which may have an impact on global trade. Work orders for the next season between January and April are still some 15 per cent to 20 per cent less than what they had been in the preceding season between September and December.

Apparel imports of Japan from January 2022 to October 2022 rose by 27 per cent year on year in terms of value. In volume terms imports during the ten-month period of 2022 grew up by five per cent.

China’s exports to Japan grew 22 per cent year on year. China has a 56 per cent share in total apparel import values of Japan. Vietnam’s exports to Japan grew by 41 per cent. Imports from Bangladesh valued were up 35 per cent in January 2022 to October 2022 whereas India’s apparel exports to Japan grew by 23 per cent. Japan’s apparel imports from Pakistan and Indonesia declined in weight-wise exports on a year on year basis.

Imports of clothing and accessories by Japan increased by 40 per cent year on year in October 2022.They were three per cent of Japan’s total imports during the period. The country’s imports of textile yarn and fabrics in October 2022 were 45 per cent higher than the same period of last year. Yarn and fabric imports were one per cent of the total imports by Japan.

The country’s exports of textile yarn and fabrics during October 2022 increased by 17 per cent year on year.

Garment factories in Sri Lanka are closing down. One reason is enhanced electricity tariffs. Since factory owners are finding it hard to compete with other countries that have much lower overheads, they are taking steps to shift to other countries.

One company which has three factories in Sri Lanka has decided to shut down and has asked its 5,000 workers who will lose their jobs to apply for employment to its factories in India. The US, EU and the UK comprise about 86 per cent of Sri Lanka’s total apparel exports. But despite impressive exports so far in 2022 the industry envisages a 25 per cent to 30 per cent decline in the remainder of the year. This is mainly due to the economic downturn’s impact on future orders from the US and EU, while the war in Ukraine has pushed up logistics and energy costs.

Sri Lanka’s apparel exports fell nine per cent in November 2022. Exports to the US were down by 17 per cent while shipments to the EU (excluding exports to the UK) saw a marginal drop of three per cent and exports to the UK fell by 29 per cent.

The apparel industry is Sri Lanka’s largest exporter , employing nearly one million both directly and indirectly, across 350 manufacturing plants island wide.