Bangladesh had fixed a target of reaching $50 billion in apparel exports by 2021. But now it seems like an unlikely target. Achievement would require an export growth of more than 12 per cent while growth currently hovers around three per cent.
The country is losing competitiveness globally. Buyers are shifting to Vietnam and other neighboring countries. Another factor is the devaluation of the euro. The Bangladeshi currency remains strong against the dollar. Its competitors are taking advantage of devaluation of their currencies against the dollar. Turkey and Vietnam have devalued their currencies and this is helping their export growth.
Another problem Bangladesh has had to face is a fall in price of apparels in the EU and US markets. In 2015, prices of Bangladeshi apparels dropped 3.81 per cent and 0.76 per cent in the US and EU. Last year, prices came down by more than one per cent in the US and 3.19 per cent in EU countries.
In the last two years, production costs in Bangladesh have increased by up to 17 per cent due to several reasons including a hike in gas prices. Bangladeshi exporters have lost a seven per cent market share in Canada and six per cent in the UK.