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Bangladesh top denim supplier to EU, US market sees a dip

Bangladesh has become the largest denim supplier to the European Union. The country secured a 21.18 per cent denim market share in the 28-nation bloc during January to June 2016. In contrast, Bangladesh’s denim shipments to the US have seen a dip for the last seven years. One reason is the US has increased denim imports from Mexico due to competitive prices and shorter lead times. Besides, American retailers get duty benefits for sourcing from Mexico. Bangladeshi garment imports are subjected to a 15.62 per cent duty upon entry to the US, while Mexico's wares get duty-free access. Moreover the US itself produces a lot of denim garments.

Another important reason for the slow growth of denim exports is that US retailers purchase low-cost denim products in bulk from China. Despite the slow growth in denim exports, Bangladesh still remains the third largest supplier in the US market.

Currently, Bangladesh has 30 denim mills. The collective production capacity of the mills is 435 million yards a year. In terms of denim sales, the US and the UK are two major markets of Bangladesh. Bangladeshi entrepreneurs supply denim products to major global retailers including Levi's, Diesel, G-Star RAW, H&M, Uniqlo, Tesco, Wrangler, s.Oliver, Hugo Boss, Walmart, and Gap.