Bangladesh Loses Ground in EU Apparel Market

Bangladesh is facing growing pressure in the European Union’s ready-made garment market, with exports declining despite the country’s low apparel prices. Vietnam, by contrast, has strengthened its position by exporting garments at significantly higher prices. According to Eurostat data, Bangladesh exported garments to the EU at an average price of €13.88 per kilogram during January-June this year. Its export value fell 16.43 percent to €8.64 billion, while export volume declined 8.22 percent. Bangladesh’s share of total EU garment imports fell from 22.73 percent in the first half of last year to 21.03 percent this year.

Bangladesh has remained the EU’s second-largest garment supplier after China since 2012. Vietnam, meanwhile, exported garments at an average price of €29.32 per kilogram, up 13.43 percent from €25.84 a year earlier. Although its export volume fell 11.52 percent, its export value rose 0.36 percent to €2.07 billion. The overall EU garment import market also weakened. EU buyers imported €41 billion worth of garments from global suppliers during the first half of the year, down 9.70 percent year on year. However, imports increased by 3 percent in June. China remained the largest supplier, accounting for about 28.8 percent of EU garment imports. Vietnam’s market share increased slightly, while Bangladesh’s declined.

Sheikh HM Mostafiz, director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, “The demand for man-made fiber (MMF) garments was high last season due to the unstable cotton market. However, our factories produce more cotton garments.” He said Vietnam has an advantage because it produces more MMF garments, while some Bangladeshi cotton orders are shifting to India. He also pointed to India’s free trade agreement with the EU as a factor attracting buyers. Bangladesh saw some improvement in June, when garment export volume to the EU rose 6.53 percent. However, lower prices limited the increase in export value to just 0.87 percent. He also warned that ongoing gas and electricity shortages could put future orders at risk. “If this situation does not improve quickly, buyers may withdraw their purchase orders. Because they do not want to be in uncertainty.”