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US-China trade war fuels demand for Bangladesh denim

"Statistics from the Directorate-General of the European Commission Eurostat reveal Bangladesh denim exports to the EU, during January-August 2018, increased 4.23 per cent to reach €917.14 million compared to the same period last year. The country’s denim manufacturers saw a healthy rise in exports to the US and European Union (EU) markets, beating China as the world’s second largest economy posted only a moderate growth. As per the US Office of Textiles and Apparel (OTEXA), the country witnessed a 14.20 per cent rise in export earnings from January to September 2018. China on the other hand earned 1.3 per cent totaling up to $683 million in export earnings, while Mexico saw a 1.08 per cent increase from 2017 to $595.40 million."

 

US China trade war fuels demand for Bangladesh denim 001Statistics from the Directorate-General of the European Commission Eurostat reveal Bangladesh denim exports to the EU, during January-August 2018, increased 4.23 per cent to reach €917.14 million compared to the same period last year. The country’s denim manufacturers saw a healthy rise in exports to the US and European Union (EU) markets, beating China as the world’s second largest economy posted only a moderate growth.

As per the US Office of Textiles and Apparel (OTEXA), the country witnessed a 14.20 per cent rise in export earnings from January to September 2018. China on the other hand earned 1.3 per cent totaling up to $683 million in export earnings, while Mexico saw a 1.08 per cent increase from 2017 to $595.40 million. Vietnam earned 41.95 per cent more i.e. $205.43 million from $144.72 million in 2017. While the exports of Cambodia increased to 30.85 per cent to $88.34 million.

Rise in Bangladesh exports to EU

As per Eurostat Bangladesh earned 4.23 per cent higher revenue from exporting denim to EU countries betweenUS China trade war fuels demand for Bangladesh denim 002 January to August 2018 compared to the corresponding period last year. Turkey recorded an 11 per cent deficit in earning to €687.28 million from €772.93 million in 2017. Pakistan saw a 4.83 per cent rise to €500.56 million, while China’s exports declined by 14.30 per cent to €304.79 million.

Improved technology, safety standards drive growth

Many factors have worked in favour of Bangladesh such as: improved technology in fabrics manufacturing; better safety standards in the apparel sector; and the ongoing trade war between China and the US. The Alliance for Bangladesh Workers, a platform of American buyers certified Bangladesh as a safe place, which boosted buyers’ confidence for sourcing products from the country.

In recent times, production costs in China and other countries have gone up due to an increase in wages. EU manufacturers are moving to Bangladesh for sourcing denim products. On the other hand, Bangladesh has increased its production capacity in both denim fabrics manufacturing and other denim products. Bangladeshi manufacturers have also moved to introduce latest technologies for improved quality of products.

Bangladesh has established state of the art denim fabrics manufacturing plants with increased production capacity. This attracted more work orders from buyers in the US and EU, as a result, manufacturers can supply orders within much shorter time compared to earlier.

Trade war boosts export earnings

The US is the single largest importer of clothing and China is the largest exporter of apparel goods in the world. The trade war between these two giants has brought in more orders for Bangladeshi manufacturers. As the trade war is a threat for the US importers over duty imposition, Bangladesh is benefitting the most from this conflict.

 

 
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