Bangladesh’s imports of cotton may decline this marketing year. Contributing reasons are rising global raw cotton prices, decreased apparel production as a result of the energy crisis in Bangladesh, global economic slowdown and high inflation.

Bangladesh is the world’s second largest garment exporter and is highly dependent on imports to make yarn.Among the major suppliers of cotton to Bangladesh, India is on the top, followed by Benin, Brazil, Burkina Faso and the US.

As of October 2022 raw cotton imports amounted to 7.1 million bales, lower than 7.5 million bales of the same period of 2020.Total cotton cultivation in Bangladesh covers only 0.55 per cent of the country’s arable land.Domestically produced cotton accounts for less than two per cent of total cotton consumption in the country.

But the garment industry in Bangladesh is currently facing numerous challenges, including gas and electricity shortages, increased fuel prices, and high levels of inflation.Most readymade garment factories are not able to fully operate due to significant load shedding. In addition, some European and American brands are deferring shipments and canceling work orders due to ongoing economic issues and high inflation at home. Garment purchase orders slumped approximately 20 per cent to 30 per cent in June and July this year due to the global economic turbulent situation.

China’s consumption of cotton has fallen. Slowing global economic growth has hurt the demand for textiles.China’s cotton consumption in the 2022/2023 crop year that began in September 2022 was 7.5 million tons, 2,00,000 tons lower than the forecast.

Growing enthusiasm by farmers to sell corn ahead of next month’s Lunar New Year holiday as well as easing Covid restrictions on movement have boosted supply of the grain, pressuring the market.

An expected increase in consumption and willingness to replenish stocks may help corn prices stabilise at a high level. China’s position as the top global cotton importer is weakening. Cotton shipments are flowing into flourishing textile industries in competing countries. Soon after China joined the World Trade Organization in 2001, its textile manufacturers became the world’s leading importers of cotton. However, following years of rising production costs, volatility from government intervention in the market, and government caps on the volume of imports, China’s cotton imports dropped from their peak of 24.5 million bales in 2011 to 4.4 million bales in 2015, although they rebounded to 9.5 million bales in 2021.

Over the same period, competing countries such as Vietnam, Pakistan, Indonesia, Bangladesh, and Turkey have expanded their textile industries and boosted cotton imports, which combined now exceed those of China.

Sustainability is the new mantra in the world of fashion and mostly associated with apparel. However, this movement also applies to footwear as consciousness seeps into consumers and manufacturers, and legislations in parts of the world. As per Future Market Insights study, footwear’s contribution is 20 per cent to the negative environmental impact created by the fashion industry. The footwear sector worldwide generates 700 million metric tons of CO2 as a byproduct of its raw material sourcing and production. The statistics states on an average, it takes anywhere between 30 to 40 years for a pair of shoes to fully decompose in landfills and 300 million units are being discarded every year.

For this sector, just like its apparel counterpart, socially conscious consumers are driving the change towards sustainable sourcing of raw material, manufacture and reduction of wastage. An NPD data revealed that 36 per cent individuals with Gen Z and millennials have shopped in the recent past to support a brand’s social position on sustainability and environmental consciousness. This has triggered brands to take a more future-first approach through an ecologically sustainable and socially responsible business. The good news is the footwear sector has taken note and is trying to change to more accountable shoe manufacturing. Since 2019, usage of recycled material in footwear increased by 70 per cent year-on-year as conscious startups led the way.

Footwear makers face sustainability challenges

As footwear jumped on to the socially responsible bandwagon later than apparel, it is facing certain challenges to overcome and carry forward a sustainable manufacturing process. Fully-sustainable footwear requires deep investment in terms of technology and talent, two things that are not easily available for the sector at the moment. The complexity of manufacturing footwear, the size of the markets, and unpreparedness in terms of recycling and waste management are the major roadblocks and the fact that sustainable raw material is expensive isn’t helping either.

As consumers step out of the Covid-19 break and return to purchasing footwear, particularly in sports shoes and casual footwear, manufacturers will soon come out of their self-imposed curb on investing for sustainable footwear which they had decided during the uncertain Covid times. Since 2019,

Asia Pacific leads in sustainable footwear

Fashion for Good is a global initiative to inspire change and drive the collective movement to make fashion a force for good. It has been working hard to transform manufacturing processes at a structural level throughout the apparel and footwear supply chain through funding initiatives towards sustainable solutions in hubs like India, Vietnam and Bangladesh. Consequently, it is APAC brands that are leading this conscious change towards sustainable footwear.

The European Commission is also trying to promote sustainable footwear and apparel by doing its bit. In 2020, the European Social Innovation Competition aimed to enhance eco-friendly and socially responsible products for its markets. The competition is seeking creative solutions that promote sustainable production, usage and adoption of fashion, as well as the shelf life of fashion products. The EU has the largest number of conscious consumers for eco-friendly and socially responsible fashion products and is driving not only awareness but also manufacturers to continually innovate as shareholders take note of this growing demand.

Committed footwear brands

Brands that have started rolling out sustainable footwear include the Adidas Group, Native Shoes, Tropicalfeel, Nike, Rothy’s, Veja, Reformation, Nisolo, New Balance, Matisse Footwear, Amour Vert, and Threads 4. Adidas has pledged to only use eco-friendly materials by 2024 and is testing footwear made from 100 per cent recyclable material. Reebok is soon to introduce plant-based instead of petroleum-based materials. The brand Reformation uses water-based instead of chemical-based adhesives and bio-materials for the heels rather than plastic.

A International Trade Center (ITC) report ‘The Garment Costing Guide’, shows Bangladeshi suppliers are getting the rough end of the stick in the buying price-points they receive compared to fellow nations that supply readymade garments to the international market. This revelation corroborates the complaints that the nation’s garment exporters have been complaining about for the longest time about their products consistently being placed at lower points than others. ITC connects small businesses in developing and underdeveloped countries to international markets, offering the former to seek profitable exporting opportunities worldwide. It has a joint mandate with the World Trade Organisation (WTO) and with the United Nations through the United Nations Conference on Trade and Development (UNCTAD).

Comparing apples with apples

Bangladesh has established its pole position as one of the leading exporters of readymade garments, second only to China. In fact, in 2022, it overtook China in the EU market and further strengthened and increased its market share in the US. Then why is Bangladesh fetching such low prices? As per the ITC report, retailers and buyers choose to pay anywhere between 32 and 83 per cent less for Bangladesh- manufactured garments, than they pay for the same products from other countries they buy from.

While Bangladesh has the company of Pakistan and Cambodia in fetching much lower prices than other supplier countries, this is no consolation for the world leader in garment exports. Vietnam, Indonesia, Turkey and Mexico are consistently given higher than the average rates.

The report went into specific examples based on purchasing price-points in 2020: A men’s woven trouser from Bangladesh fetched $7.01 per piece, which was 9.20 per cent below the global average of $7.72. For the same product, Vietnam received $10.76 per piece and Sri Lanka and India received $8 and $8.41 respectively. Similarly, a bra made from man-made fiber in Bangladesh received only $3.19 per piece, 18 per cent below the average global price but Vietnam pulled in $6.60 for the same unit. Although jeans from Bangladesh are considered world-class, the prices they fetch are anything but. A pair of jeans manufactured in Bangladesh got $7.81, 7.2 per cent less than the global average. On the other hand, a pair of jeans manufactured in Vietnam secured $11.55.

Bangladesh needs to catch up to global trends

Looking into reason for Bangladesh’s poor price-point performance, ITC’s report points out the new hubs of garment manufacturing such as Hong Kong, Singapore and South Korea have transformed the manufacturing model from simple and basic products to creating global brands that retail globally, and invest heavily in engineering, contemporary IT and cutting-edge technology.

Unfortunately, under-developed countries like Bangladesh, Pakistan and Cambodia did not catch on to this trend in manufacturing and did not invest in product modernization. They remain stuck to simple cut and sew operations, producing vast quantities of commodity-type clothing which cannot command a premium. The report advices manufacturers in these under-developed nations to consider upgrading their production technology and IT to catch up and fetch prices they deserve. Another factor that affects Bangladesh’s low price-points is its aggressive strategy to secure Western orders for which it is flexible to lowering prices that has created a situation where international buyers are aware that they can manipulate price negotiations.

ITC advised Bangladeshi manufacturers to first assess the global market and reflect the demand for value-added goods such as garments made from technical textiles, sportswear, leisure wear, etc. The advice suggests realigning their business model and manufacturing lines to a modern and automated line that is digitally enabled to manufacture style-enhanced products.