Intense price competition among readymade garment makers in Asia has resulted in reduced profit margins for Bangladesh clothing exporters. The country has to import most of the raw materials for the sector. Apparel exports of the country have declined in recent months due to worldwide sluggish demand while its competitors have seen a rise. Bangladesh has a higher lead time and it imports cotton from abroad which increases the cost and impedes its exports.
On the other hand, since Pakistan and Vietnam source most raw materials locally, their products are marked with lower prices. In the first four months of the current fiscal year apparel exports of Bangladesh decreased 6.67 per cent. On the other hand, Vietnam’s earnings from apparel exports increased by 10.54 per cent. Also the inflow of investment into Bangladesh’s garment sector is sluggish both in terms of new entrepreneurship and expansion as buyers are not paying good prices. Europe is the pivotal export market for Bangladesh but has reduced imports. In general the online apparel market is affecting export growth.
In the last seven months 59 garment factories have shut down and 25,900 workers have lost their jobs. In July-October of this fiscal year, Bangladesh’s earnings from knitwear exports were up 5.73 per cent.