[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

Garment export to EU may face cutthroat competition

Bangladesh's readymade garment (RMG) export to its largest destination may face tough competition as competitors like China, Vietnam, Cambodia, Pakistan and Sri Lanka have incrementally raised their concentration in the European Union (EU) for a decade, sources say. The trade race may intensify

thefinancialexpress.com.bd

Garment export to EU may face cutthroat competition
New US tariff regime likely to intensify trade race further: Experts
Monira Munni
Published :
May 09, 2025 00:44
Updated :
May 09, 2025 00:44

Bangladesh's readymade garment (RMG) export to its largest destination may face tough competition as competitors like China, Vietnam, Cambodia, Pakistan and Sri Lanka have incrementally raised their concentration in the European Union (EU) for a decade, sources say.

The trade race may intensify further in the days ahead, especially following the new US tariff regime, as the reciprocal tariffs on higher scales may force the players to diversify their shipment destinations to the 27-nation bloc.

Data analysis shows 56 per cent of China's total apparel exports were destined for the EU in 2012, which edged up to 68 per cent in 2023. The figure was 44 per cent for the US in 2012, which decreased to 32 per cent in 2023.

About 32 per cent of Vietnam's total apparel was shipped to the EU in 2023--an increase from 26 per cent in 2012. The US accounted for 68 per cent in 2023, which was 74 per cent in 2012, according to data.

Cambodia's overall apparel shipments to the EU came to 63 per cent in 2023, which was 40 per cent in 2012. On the other hand, 60 per cent of its apparel was destined for the US in 2012, which fell to 37 per cent in 2023, according to latest data.

Similarly, 52 per cent of Pakistan's total apparel exports went to the EU in 2012, which rose to 71 per cent in 2023. Some 48 per cent of its total apparel exports were shipped to the US market in 2012, which fell to 29 per cent in 2023.

Sri Lanka's apparel exports were 46 per cent to the EU and 54 per cent to the US in 2012, which stood at 57 per cent to the EU and 43 per cent to the US in 2023.

Only India is an exception as 42 per cent and 58 per cent of its total garment exports were destined for the EU and the United States, respectively, in 2023, which was 48 per cent to the EU and 52 per cent to the US in 2012.

On the other hand, the EU accounted for 79 per cent of Bangladesh's total readymade garment (RMG) exports in 2023, up from 72 per cent in 2012. About 21 per cent of the total RMG was shipped to the US in 2023, which was 28 per cent in 2012.

Talking to The Financial Express, Dr Mohammad Abdur Razzaque, chairman of Research and Policy Integration for Development (RAPID), said the greater concern lies beyond the US market. "Constrained by American tariffs, supplies may be diverted to other key destinations, such as the EU, Japan, and Canada."

With Bangladesh holding more than 20-percent share in the EU apparel market, this diversion could intensify price competition, squeezing margins and undermining profitability, he also predicts.

"Compounding these pressures is the risk of competitive currency devaluations among export-reliant economies, as countries seek to counteract the loss in price competitiveness," Dr Razzaque explains.

For Bangladesh, which is already contending with foreign-exchange shortages and inflationary stress, such developments could deepen macroeconomic vulnerabilities and complicate efforts toward external and fiscal stabilisation, the economist adds.

When asked, Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said competition would increase on the existing market not only for foreign competitors but also for local exporters.

Local exporters who ship goods to the US may shift to other countries, especially to the EU, which would intensify the competition within the borders, he notes, fearing "unhealthy price competition" among local exporters to linger.

The situation would be "terrific" if the same trend is followed by other garment-producing countries, resulting in "price pressure" as the market size of the importing countries, like the EU, remains the same, he explains.

Abdullah Hil Rakib, managing director of Team Group, says business shifting from the US would go to the EU, slowing the latter's existing business and it would be for the US tariff hike.

"The situation will be concerning as there would be huge price pressure," says Mr Rakib, also a former leader of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Mahmud Hasan Khan, managing director of Rising Group, thinks the likely outcome is a sharp drop in demand on the US market, with severe consequences for the exporting countries.

He also echoes Mr Hoque' views about the price pressure, raising questions as to whether local exporters would get the same volume of work orders that they are receiving.

Meanwhile, exporters have said they are not getting fair prices of locally-made garments, and in many cases, they accept work orders below their production costs mainly to run the business and pay workers.

According to BGMEA data, Bangladesh's apparel shipments to the EU rose by 4.86 per cent year on year to $19.77 billion in 2024.

In 2024, Bangladesh exported 1.23 billion kilograms of garments to the EU, up by 10.18 per cent from 1.10 billion kg shipped in 2023.

The per-unit price fell to $16.07 per kg in 2024 from $16.88 per kg in the previous year, marking a 4.84-percent decline.

Though the EU's overall apparel imports increased 1.53 per cent year on year in terms of value to reach $92.56 billion in 2024, the import volume grew 8.98 per cent to 4.27 billion kg, resulting in a 6.83-percent decline in average unit prices, impacting major sourcing countries, including Bangladesh.​

 

[Saif]

RMG exports to US soar by 26.66pc in Jan-Mar

The country’s readymade garment exports to the United States, Bangladesh’s single largest export destination, witnessed a growth of 26.66 per cent in January-March period of 2025 to $2.22 billion, amid fears of tariffs imposed by the US.

www.newagebd.net

RMG exports to US soar by 26.66pc in Jan-Mar
Staff Correspondent 09 May, 2025, 23:15

The country’s readymade garment exports to the United States, Bangladesh’s single largest export destination, witnessed a growth of 26.66 per cent in January-March period of 2025 to $2.22 billion, amid fears of tariffs imposed by the US.

According to the latest data published by the Office of Textiles and Apparel, Bangladeshi exporters exported RMG items worth $1.55 billion in the corresponding period of 2024.

During the first quarter of 2025, Bangladesh outpaced its major competitors in terms of export growth rates.

In the first three months of 2025, the North American country’s RMG imports from its global suppliers increased by 10.96 per cent to $20.04 billion, compared with those of $18.06 billion in the same period of 2024.

In terms of volume, Bangladeshi RMG exports to the US in January-March of 2025 saw a positive growth of 25.24 per cent to 733.99 million square metres from that of 586.04 million square metre in the same period of 2024, Otexa data stated.

Bangladesh’s market share in the North American country stood at 9.61 per cent in the first quarter of 2025.

According to the Otexa data, amid the ongoing trade war between the US and China, Vietnam outperformed China as the highest exporter to the US in the first quarter of 2025, while China slipped to the second place.

Among the major suppliers, US apparel imports from Vietnam experienced a positive growth of 13.98 per cent to $3.88 billion in January-March, from that of $3.4 billion in 2024. Vietnam held a market share of 19.2 per cent.

The Otexa data stated that China exported apparel items worth $3.60 billion in the reporting period, a positive growth of 4.11 per cent from that of $3.45 billion in the same period of 2024, claiming a market share of 20.50 per cent.

Followed by Bangladesh, India secured the fourth position by exporting apparel items worth $1.51 billion in January-March of 2025, registering a positive growth of 24.04 per cent compared with that of $1.22 billion in the same period of 2024, with a market share of 6.13 per cent in the US.

According to the data, the US’ RMG imports from Indonesia surged by 20 per cent to $1.23 billion. In comparison, RMG imports from Cambodia increased by 14.70 per cent to $927.09 million in the same period. This made Indonesia and Cambodia hold the fifth and sixth place respectively with a market share of 5.48 per cent and 4.83 per cent.

However, the country’s RMG manufacturers are still concerned about the US’ 37 per cent tariff imposition on all Bangladeshi exporting products, though it has been paused for 90 days.

They said that the 90-day pause was not a permanent or sustainable solution and the government should take immediate action through diplomatic channels to resolve the issue before 90 days.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, said that the country must narrow trade imbalance to protect exporters from the US tariff.

However, he said, the abnormal imposition of tariffs on Chinese products accelerated the shifting of work orders to Bangladesh, impacting US exports.

Mohiuddin Rubel, a former Bangladesh Garment Manufacturers and Exporters Association director, said that China’s export growth to the US lagged behind during the period and Bangladesh might have captured a share of China’s declining orders.

He, however, said that the impacts of the new US trade policies were yet to unfold and urged the government to take proper actions.

According to the Otexa data, Bangladesh’s apparel exports to the US in 2024 saw a marginal 0.75 per cent growth to reach $7.34 billion compared with those of $7.29 billion in 2023 amid fluctuations in shipments throughout the year.​

 

[Saif]

EU competition major challenge before garment sector

Bangladesh's ready-made garment sector, the backbone of its export economy, faces its most severe challenge in decades. The impending 37 per cent US tariff, set to take effect after June 9, 2025, would be damaging enough on its own. But the greater threat lies in Europe where 79 per cent of Banglad

thefinancialexpress.com.bd

EU competition major challenge before garment sector
Published :
May 11, 2025 00:06
Updated :
May 11, 2025 00:06

Bangladesh's ready-made garment sector, the backbone of its export economy, faces its most severe challenge in decades. The impending 37 per cent US tariff, set to take effect after June 9, 2025, would be damaging enough on its own. But the greater threat lies in Europe where 79 per cent of Bangladesh's RMG exports currently go. As competitors like China, Vietnam and Cambodia face similar US tariff pressures, they are inevitably turning to the EU market as their alternative destination. This is bad news for Bangladesh. Just as its US market access shrinks, its primary export destination faces a flurry of competitors vying for market share. The EU's importance cannot be overstated as it absorbs nearly four times more Bangladeshi garments than the US market. What was once Bangladesh's safe harbour is about to become its most contested battleground.

The warning signs of growing competition have been visible for years. As reported in this daily, between 2012-2023, China increased its EU apparel share from 56 per cent to 68 per cent, Vietnam from 26 per cent to 32 per cent and Cambodia made the most dramatic leap from 40 per cent to 63 per cent. These weren't random fluctuations but strategic shifts by countries preparing for exactly this scenario. Now, with the US effectively closing its doors to affordable garments through punitive tariffs, these countries have no choice but to redouble their efforts to catch European market. Unfortunately for Bangladesh, which relies heavily on EU market access for foreign currency earnings, this surge in competition could be devastating. The real threat now lies not just in losing the US market, but in losing ground in Europe.

What follows is an intense race to the bottom. Greater competition means thinner margins and thinner margins threaten the sustainability of the entire sector. The pressure is already evident in the declining per-kg price of Bangladeshi garments in the EU which reportedly dropped by 4.84 per cent over the past year. This decline indicates that exporters are being forced to sell more at lower prices just to stay in the game, and as the competition becomes more severe, the price will fall further. Experts also warn of competitive currency devaluations where export-dependent economies may artificially devalue their currency in order to stay price-competitive. Meanwhile, Bangladesh's impending graduation from Least Developed Country (LDC) status in 2026 will strip away its duty-free EU access at the worst possible time. The irony is that Cambodia, one of Bangladesh's competitors in the RMG exports, will retain these privileges as it remains an LDC. That gives Cambodia a distinct edge just when Bangladesh's competitiveness is set to weaken.

So what can Bangladesh do to navigate this increasingly treacherous trade environment? The first task is to address the US market. No visible progress has been made in reaching a trade understanding with the US in the two months of tariff pause that elapsed. Given that the US rationale for tariffs is the export-import imbalance, Bangladesh needs to urgently identify potential imports from the US to build a more balanced trade relationship. For the EU, Bangladesh must secure a new trade agreement before LDC graduation, following the model of Vietnam's EU FTA. Simultaneously, Bangladesh must actively diversify its export destinations beyond the traditional strongholds of the EU and the US. Countries like Japan, Canada and emerging markets offer potential avenues and should be actively cultivated. Most critically, Bangladesh needs a export strategy on a war footing involving all stakeholders, from government to manufacturers to trade bodies. Without swift, strategic action, Bangladesh risks losing its position it has built in the global apparel trade through decades of effort.​

 

[Saif]

Denim exports to US, EU up 56pc, 32pc

Locally-made denim items' exports to the two major destinations - the US and the European Union (EU) - during the first two months of 2025 witnessed significant growth of over 56 per cent and more than 32 per cent, respectively. Bangladesh fetched $138.75 million from denim exports to the

thefinancialexpress.com.bd

Denim exports to US, EU up 56pc, 32pc
Monira Munni
Published :
May 13, 2025 00:36
Updated :
May 13, 2025 00:36

Locally-made denim items' exports to the two major destinations - the US and the European Union (EU) - during the first two months of 2025 witnessed significant growth of over 56 per cent and more than 32 per cent, respectively.

Bangladesh fetched $138.75 million from denim exports to the US in this period, up by 56.33 per cent from the earnings of $88.75 million in the corresponding period of 2024, according to data compiled by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

US imports of denim items from Mexico, Pakistan, Vietnam, and China recorded 16.27 per cent, 33.29 per cent, 6.49 per cent, and 6.99 per cent growth, respectively, in this period.

On the other hand, Bangladesh's denim exports to the EU during this period stood at $285.52 million, recording 32.43 per cent growth from $215.60 million earned in the corresponding months of 2024.

Pakistan, the second largest denim exporter to the EU, logged 48.11 per cent growth in this period, followed by Turkey at 0.06 per cent, Tunisia at 4.68 per cent, and Cambodia at 55.24 per cent, data shows.

Bangladesh remained the top denim supplier both to the US and the EU in 2024 as the country fetched the highest $675.65 million and $1.28 billion, respectively, from the two destinations, data shows.

Yeasin Al Faisal, manager at Argon Denims Ltd, told The Financial Express the denim business is growing and they are not facing any impact of the new US tariff regime as they mostly ship goods to the EU.

Argon Denims is participating in the 18th edition of Bangladesh Denim Expo that kicked off on Monday at the International Convention City Bashundhara (ICCB) in the capital.

Faisal said they participated in the show to display their products and innovation and also to know about what other suppliers are showcasing.

The two-day event aims at helping the industry enhance its capacity and develop innovation to navigate the uncertain times of tariff and trade war.

A total of 57 exhibitors from 13 countries, including Bangladesh, India, Pakistan, China, Turkey, Spain, Italy, Vietnam, and the US, joined the show to display their latest innovation and goods.

Sanaul Haque, executive director of Azlan Denim Ltd, a concern of Sim Group, said they are expanding their capacity as the demand for denim items is increasing.

Currently, they produce 1.6 million yards of denim fabrics monthly, which will increase to 2.50 million by July, he added.

Abdul Kader Khan, managing director of Khan Accessories and Packaging Company Ltd, said they are exhibiting their accessory items as some of their buyers who have denim business worldwide insisted them to join the fair.

As denim exports are growing, he expects to get new buyers too.

When asked, Chao Ji, sales manager of Black Peony Textile Co Ltd, a Chinese denim fabric producer, said they have been participating in the denim show for the last six years and have their own office in Dhaka.

"Bangladesh is a potential market, and business is growing slowly here with good prices," he said.

Brant Tong, sales manager of XDD Textile, a Vietnamese denim fabric maker, said there are a number of denim factories and washing plants in Bangladesh.

"So, there is huge demand for denim fabric, and we are here in search of more business opportunities," he said.

Speaking about the US new tariff regime, he said business in Vietnam slowed in recent times with a decline in work orders as buyers are now in a wait-and-see situation.

This is because no one knows what would happen after the three-month pause of the proposed US tariffs, added Tong.

The majority of his factory's denim production is destined for the US, he said, adding that buyers are waiting to see further action or negotiations with the US.

He also said some of the buyers have already postponed their bookings.

Md Amdadul Hoque, country representative (Bangladesh) of Diamond Denim, a Pakistani denim factory, said business in May and June usually remains slow and that is what is happening now.

He, however, said they have to bear the cost of an additional 10 per cent hike in tariffs imposed by the US.

Nauman Ahmad, general manager of marketing (denim business) at Azgard Nine Limited, another denim fabric maker based in Pakistan, said there are uncertainties in the US market for all supplier countries - not only Pakistan but also others in Asia.

This is the biggest challenge for the current time, he said.

They have business mostly with the EU, he said, adding their business is moderate and they have not faced any negative impact for the US tariff so far.​

 

[Saif]

Local RMG to remain competitive even if tariffs rise

Bangladesh should improve garment quality and delivery speed amidst intense competition in global supply chains arising from US President Donald Trump’s recent reciprocal tariffs, said some international traders yesterday..Bangladesh has the opportunity to retain its competitive edge due t

www.thedailystar.net

Local RMG to remain competitive even if tariffs rise
Believes international backward linkage companies for denim

The 18th edition of Bangladesh Denim Expo at the International Convention City Bashundhara in Dhaka will come to a close tomorrow. Photo: collected

Bangladesh should improve garment quality and delivery speed amidst intense competition in global supply chains arising from US President Donald Trump's recent reciprocal tariffs, said some international traders today.

Bangladesh has the opportunity to retain its competitive edge due to its large-scale production capacity, something international clothing retailers and brands always take into consideration, they said.

China and Vietnam are facing higher tariffs than Bangladesh in the US market, but there are others facing far less, such as India, Pakistan, Kenya, Jordan and Egypt, they said.

The latter do not have high production capacities, for which they cannot cater to large-volume work orders, they added.

"There is no way to replace Bangladesh because of its production capacity… It is not a matter of tariffs only," said Matteo A Urbini, managing director of Italy-based Soko Chemicals.

He was talking to The Daily Star while attending the 18th edition of Bangladesh Denim Expo at the International Convention City Bashundhara in Dhaka.

Urbini supplies a technology based on a chemical called "hydrogel" for washing denim fabrics to 60 companies in Bangladesh.

The technology is said to require just eight litres of water to wash one kilogram of denim fabric, whereas conventionally 80 litres are required.

Bangladesh is still competitive, said Herve Denoyelle, a representative of French hemp and flax fibre manufacturer The Flax Company, when asked about alternative clothing sourcing destinations to Bangladesh.

Bangladesh and China will remain competitive for mass consumption. Once the final rates of US tariffs are decided after the ongoing 90-day pause, business will grow again, he said.

Products from China and Vietnam will become more expensive because of their higher tariff rates, and Bangladesh should focus on recycled and sustainable products, he said.

His company produces 8,000 tonnes of fibre a year and supplies nearly 100 tonnes to 10 companies in Bangladesh for the manufacture of denim fabrics.

Robert Deakin, sales director of China-based Deyao Textile, which manufactures denim fabrics, said he was cautiously optimistic about Bangladesh.

The final tariff rates are yet to be decided, and business will prevail even if a 37 percent tariff is imposed on Bangladeshi products, he said.

The two-day exposition has brought 57 exhibitors from 13 countries, including India, Pakistan, China, Turkey, Spain, Italy, Vietnam, the United Arab Emirates, Germany, Switzerland and the USA, according to a statement from the organiser.

"Bangladesh has emerged as the fastest-growing apparel exporter to the United States in the first quarter of 2025, posting the highest year-on-year growth of 26.64 percent," said Mostafiz Uddin, founder and CEO of Bangladesh Denim Expo.

This placed Bangladesh ahead of other major exporters such as India (24.04 percent), Pakistan (17.49 percent), Vietnam (13.96 percent) and China (4.18 percent), he said.

Bangladesh is the largest denim exporter to both the US and Europe, he added.​

 

[Saif]

Bangladesh set to remain world’s top cotton importer in MY26

Bangladesh is on track to retain its status as the world’s biggest cotton importer in the marketing year (MY) 2025-26, with imports projected to reach 8.5 million bales, according to a record-setting forecast by the United States Department of Agriculture (USDA).

www.thedailystar.net

Bangladesh set to remain world’s top cotton importer in MY26

Bangladesh is on track to retain its status as the world's biggest cotton importer in the marketing year (MY) 2025-26, with imports projected to reach 8.5 million bales, according to a record-setting forecast by the United States Department of Agriculture (USDA).

Vietnam is set to follow closely with 8 million bales, marking an all-time high for both countries, as per the USDA's latest Cotton: World Markets and Trade report.

The report highlights a modest rebound in global cotton consumption, which is expected to hit a five-year high of 118.1 million bales. This resurgence is attributed to stable economic activity, particularly in major textile-exporting countries such as Bangladesh and Vietnam.

For Bangladesh, the surge in cotton imports reflects the continued expansion of its ready-made garment (RMG) industry — the backbone of its export economy.

In the first 10 months of FY25, Bangladesh's RMG exports grew 10.86 percent year-on-year to $30.25 billion, according to Export Promotion Bureau (EPB) data.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said Bangladesh's decision to import more cotton from the US is part of a broader strategy to reduce the trade gap between the two countries.

He noted that the record volume of cotton imports would also strengthen Bangladesh's case for securing duty-free access for its RMG products in the US market.

"The government has already taken necessary initiatives in this regard," Hatem said.

He further stated that US cotton is considered the best in the world in terms of quality and consistency, making it the preferred choice for local spinners and manufacturers.

"With global buyers increasingly prioritising sustainable sourcing and natural fibres, cotton remains a vital raw material for Bangladesh's spinners and knitwear producers," Hatem added.

He viewed the USDA's import forecast as a strong endorsement of Bangladesh's capability to maintain and expand its leadership in the global apparel value chain.

The global cotton trade is also forecast to rise by 2.3 million bales to 44.8 million bales in MY26, indicating a broader uptick in demand across textile-producing economies.

China, which imported 15 million bales in MY24, is projected to import only 7 million bales in MY26. The country's shift away has left space for Bangladesh to rise to the top, which analysts say marks a notable structural shift in global cotton trade flows.

The USDA also anticipates stable cotton prices globally, aided by adequate supply, a weakening US dollar, and declining energy costs. These trends may ease cost pressures for Bangladeshi millers, who have grappled with high input costs over the past two years.

On March 17 this year, Foreign Affairs Adviser Md Touhid Hossain said Bangladesh intends to import more cotton from the US, creating mutual benefits for US suppliers and local businesses.

He added that such trade ties could offer Bangladesh protection amid former US President Donald Trump's tariff-centric policies.

Although the Trump administration has levied high tariffs on many countries, Bangladeshi goods have so far remained outside the purview of such punitive measures.

Hossain argued that sourcing more US cotton could further dissuade the administration from targeting Bangladesh, whose products face an average tariff of 15.62 percent in the US market.

He also stressed the need to boost domestic cotton production to meet at least 20 percent of the country's annual demand, amounting to about 9 million bales.

Currently, local production covers just 2 percent of that requirement.​

 

[Saif]

Apparel sector needs $6.6b investment to cut carbon emission by half: Report

Bangladesh's textile and apparel industry needs an approximate investment worth US$6.6 billion to help reduce the level of carbon emissions by half by 2030 through renewable energy and energy efficiency measures, according to a global report. Of the required amount, only $1.8 billion is currently

thefinancialexpress.com.bd

Apparel sector needs $6.6b investment to cut carbon emission by half: Report
Monira Munni

Published :
May 16, 2025 08:49
Updated :
May 16, 2025 08:49

Bangladesh's textile and apparel industry needs an approximate investment worth US$6.6 billion to help reduce the level of carbon emissions by half by 2030 through renewable energy and energy efficiency measures, according to a global report.

Of the required amount, only $1.8 billion is currently available or anticipated while there has been a gap of $4.8 billion, said the report titled 'Landscape and Opportunities to Finance the Decarbonization of Bangladesh's Apparel Manufacturing Sector'.

As of 2023, Bangladesh was among the top five countries having the highest level of potential in reduction of greenhouse gas emissions in the apparel and textile industries.

Apparel Impact Institute (Aii) in collaboration with Development Financial International, Inc (DFI) published the report on May 08 outlining how the country can close that gap and realize its decarbonization potential through strategic finance tools.

Aii is a global non-profit organisation, dedicated to identifying, funding, scaling, and measuring the apparel and footwear industry's proven environmental impact solutions and works with over 50 brands and retailers including Target, PVH, Lululemon and H&M Group that are leading the sector's global decarbonization efforts.

Bangladesh's textile and apparel industry contributes more than 80 per cent of the country's foreign export earnings, said the report.

The sector has significant potential to contribute to the goal of a 50 per cent reduction in greenhouse gas (GHG) emission by 2030, taking the industry's scale-- key production stages, including raw material processing, weaving, knitting, dyeing, finishing, manufacturing and distribution and continued reliance on fossil fuels, into consideration.

Despite its economic significance, local textile and apparel industry faces considerable environmental challenges and the high consumption of energy, water, and chemicals across the supply chain has contributed to significant environmental degradation and GHG emissions, according to the report.

In Bangladesh, natural gas burning remains the country's primary source of energy and RMG sector alone accounts for 8.2 per cent of Bangladesh's total electricity consumption, it said, adding that the textile and garment sector represents 27.8 per cent of Bangladesh's primary energy consumption.

Besides, there is growing pressure from brands and emerging global and local regulations for the industry to adopt cleaner and sustainable practices, it said.

Explaining the possible credit lines, it said as of September 2024, some 12 credit lines and revolving fund schemes have been identified, with close to $1.6 billion in available funding and $175 million in upcoming funding from International Financial Institutions (IFIs) and the national government.

"This leaves a financing gap of US$4.8 billion," it said, adding IFIs are also partnering with the government and private sector to improve energy policies, build local technical capabilities, and support decarbonisation initiatives," said the report.

It, however, found financial constraints, limited technical expertise, insufficient energy policies and inadequate infrastructure as major challenges that manufacturers face in transitioning to sustainability.

A lack of technical experts such as energy auditors in Bangladesh drives up costs and prolongs inspection processes, with energy audits averaging $10,000 - approximately double the cost in neighbouring India.

Building local expertise can help reduce costs and generate quality local jobs, the report suggested.

It further said the renewable energy market is still in its early stages, with limited renewable energy service companies (RESCO) activity and no energy service companies (ESCO) operations in Bangladesh recommending "Growth capital is needed to scale renewable energy and energy efficiency solutions."

The report also recommended, among others, enhanced support from brands, active involvement of manufacturers to address barriers like higher level of debt and perceived risks by encouraging brands to offer stronger incentives and support through various financing and de-risking instruments.

Talking to the FE, Shams Mahmud, managing director of Shasha Denims Ltd, said the industry itself has, so far, invested to help cut emissions, taking the EU regulations into consideration.

"It is difficult to make funds available mostly for small and medium enterprises as they (SMEs) don't have enough capacity and lengthy documentation procedures," he said. He went on: "The rate of interest also remains high."

Mr. Mahmud, however, said the green transition fund is not industry-friendly.

The main issue is to measure as how much decarbonization is done, he said, adding that there is a lack of skilled manpower in government agencies concerned.

About the measures, he said, his factory has undertaken to decarbonise, while they are installing new energy-efficient technology that can help reduce usages of water and chemical.

Such technology using tri-generation systems of power generation to reduce carbon footprint, enhancing the efficiency level to 85 per cent from 60 per cent in two years back.​

 

[Saif]

Apparel exports to EU surge by 33pc

Bangladesh’s apparel exports to the European Union showed a strong upward trend in the first quarter (January-March) of 2025, with total earnings increasing by 33 per cent compared to the same period in 2024...

www.newagebd.net

Apparel exports to EU surge by 33pc
Moinul Haque 17 May, 2025, 23:02

Bangladesh’s apparel exports to the European Union showed a strong upward trend in the first quarter (January-March) of 2025, with total earnings increasing by 33 per cent compared to the same period in 2024.

According to data from the Eurostat, the statistical office of the EU, From January to March 2025, EU apparel imports from Bangladesh totalled 5.68 billion euros, compared to 4.27 billion euros during the same period in 2024.

This increase of 1.41 billion euros in the quarter represents a notable 33 per cent growth in terms of value.

Knitwear exports drove much of this expansion, climbing nearly 36 per cent from around 2.39 billion euros to 3.25 billion euros. Woven apparel also performed strongly, with exports rising approximately 30 per cent from 1.87 billion euros to 2.43 billion euros.

Exporters attributed the recent surge in apparel exports to the EU to seasonal summer demand, early order placements by buyers and a recovering European market.

Although Bangladesh’s exports to the EU grew year-on-year in each of the three months, the rate of growth slowed gradually over the quarter.

Data showed that Bangladesh’s apparel exports to the EU in January 2025 posted the highest growth rate at 61 per cent, reaching 1.91 billion euros, followed by slower but healthy growth of 28 per cent in February with 1.66 billion euros and a further slowdown to 18 per cent growth in March with exports totaling 2.10 billion euros.

Bangladesh Knitwear Manufacturers and Exporters Association former president Fazlul Hoque said that the significant increase in the EU’s overall apparel imports in the first quarter of 2025 indicated a clear revival of the market.

‘The good news is that buyers are placing orders again — and the even better news is that a significant share of those orders is coming to Bangladesh. It shows that we are holding our ground, even as competition intensifies,’ he said.

The EU market saw strong growth in apparel imports in the first quarter of 2025, with total import value rising 20.6 per cent from approximately 19.44 billion euros in January-March of 2024 to 23.45 billion euros in the same period in 2025.

Knit apparel imports increased by 23.6 per cent, rising from 9.53 billion euros to 11.78 billion euros, while woven apparel imports grew 18 per cent, from 9.90 billion euros to 11.67 billion euros.

Overall, EU apparel imports rose by more than 4.9 billion euros year-on-year.

In volume terms, the EU’s apparel imports also recorded a significant increase.

Total import volume reached approximately 11.51 million kilograms in the first quarter of 2025, up from 9.57 million kilograms in the same period of 2024, a 20.3 per cent rise.

In quantity, Bangladesh’s total apparel exports to the EU rose from 2.90 million kilograms in the first quarter of 2024 to 3.61 million kilograms in the first quarter of 2025, an increase of 24.6 per cent.

Knitwear volumes grew by 29.5 per cent, from 1.76 million kilograms to 2.28 million kilograms while woven apparel exports increased by 17.1 per cent, reaching 1.33 million kilograms.

Among major EU suppliers, Bangladesh recorded one of the highest growth rates in value terms, surpassing key competitors such as China, Vietnam, Turkey, and India.

While it fell just short of Cambodia’s exceptionally high growth rate, it remained slightly ahead of Pakistan’s.

Despite the positive export trends, Fazlul Hoque cautioned that supply-side risks were mounting, particularly due to energy shortages.

He said that plans to divert gas from power generation could create significant energy supply challenges for the industry, potentially threatening Bangladesh’s ability to sustain or grow its market share.

Eurostat data showed that China retained its position as the EU’s largest apparel supplier by value. The country’s exports rose from 4.92 billion euros in the first quarter of 2024 to 6.35 billion euros in the same period of 2025, marking a 29 per cent increase. Knitwear shipments to the EU grew by 32.7 per cent, while woven apparel rose by 25.5 per cent.

Turkey saw a slight decline in total apparel exports, which fell by 0.9 per cent from 2.28 billion euros to 2.26 billion euros. While knit exports rose marginally by 1.5 per cent, woven apparel declined by 4.1 per cent, possibly reflecting changing competitiveness or supply chain dynamics.

India achieved solid growth, with EU imports rising from 1.07 billion euros to 1.37 billion euros, a 27.8 per cent increase. Knitwear grew by 34 per cent and woven by 22 per cent, indicating a broader improvement in India’s access to the EU market.

Vietnam’s apparel exports to the EU expanded by 22 per cent to 1.08 billion euros, supported by a 19 per cent rise in knitwear and a 24 per cent increase in woven apparel.

Pakistan recorded a 32.8 per cent rise in total exports, which reached 1.03 billion euros. Knitwear exports increased by 30 per cent, while woven apparel grew by 36 per cent.

Cambodia reported the fastest growth among all listed suppliers, with EU apparel imports rising by 37.8 per cent to 1.11 billion euros. Knitwear exports grew by 35 per cent, and woven garments surged by 41 per cent.​

 

[Saif]

Fast fashion, fat margins: How retailers cash in on low-cost RMG

Global fashion brands are reaping triple-digit profits on Bangladeshi garments, buying at $3 and selling for three to four times more. Yet, they continue to pressure factories to cut prices further.

www.thedailystar.net

Fast fashion, fat margins: How retailers cash in on low-cost RMG

Global fashion brands are reaping triple-digit profits on Bangladeshi garments, buying at $3 and selling for three to four times more. Yet, they continue to pressure factories to cut prices further.

A shirt manufactured in Bangladesh at a free-on-board (FoB) price of $5 often retails for as much as $28 in Europe or North America. Once shipping, warehousing, duties, and other operational costs are added, bringing the total to around $16, retailers may still earn a profit of about $12 per item.

Western retailers and brands often justify their pricing strategies by pointing to the high costs associated with global operations, including freight charges, currency hedging, warehousing, demurrage, markdowns, and advertising.

"There are overheads, of course, but let's not pretend they're not making money," said Fazle Shamim Ehsan, proprietor of Fatullah Apparels. "Especially in the mid to high-end market, many brands earn huge profits from goods made in Bangladesh."

Still, many Western buyers continue to pressure Bangladeshi factories to reduce the prices further.

A 2020 study by the European non-profit Fair Wear Foundation found that nearly 39 percent of garment manufacturers in the country had sold products at a loss.

The practice, exporters say, is mainly to preserve long-standing relationships with global retailers and to secure future contracts.

Meanwhile, data from the Centre for Policy Dialogue (CPD), a Dhaka-based think tank, suggests that Bangladesh consistently receives lower prices than its Asian competitors for similar products.

In 2020, Bangladeshi cotton T-shirts exported to the European Union (EU) fetched €1,091.5 per 100 kilogrammes, a 1 percent decline from the previous year, while Vietnam's equivalent product saw a 3 percent price increase, rising to €2,157.9.

The contrast was even sharper in pullovers.

Bangladesh's average price fell 7 percent to €1,329.5, whereas Vietnamese pullovers held steady at €2,157.8.

For garments made from man-made fibres, Bangladeshi exports declined 6 percent to €1,319.4, while Vietnam's fell by just 3 percent to €1,906.2.

The United States market reflected similar patterns, as shown in the CPD data.

The average price for a dozen Bangladeshi-made cotton T-shirts dropped from $22.43 in 2019 to $17.99 in 2020, a 20 percent fall, while Vietnamese suppliers experienced a slightly smaller decline, with prices falling from $38.2 to $31.9.

Bangladeshi sweaters and pullovers also saw a 2 percent price drop to $39.31 per dozen, whereas Vietnamese equivalents remained largely unchanged, with prices hovering around $47.

For trousers, the gap was wider still. A dozen cotton-fibre trousers for women and girls exported from Bangladesh earned $64.17 in 2020, down 12 percent from the year before. Vietnam, by comparison, received $84.6 for the same product after a smaller price adjustment of just 6 percent.

SYSTEMIC UNDERVALUATION

A 2022 report by the International Trade Centre (ITC) underscored the pattern of systemic undervaluation of Bangladeshi garments.

Men's woven cotton trousers exported from Bangladesh earned an FoB price of $7.01 per piece, which was 9.2 percent below the global average of $7.72. Vietnam received $10.76 for the same item, while Sri Lanka and India fetched $8 and $8.41.

Similarly, men's cotton jeans made in Bangladesh were sold at $7.81 per piece, 7.2 percent below the global average of $8.41, while Vietnamese jeans sold for $11.55.

Even in niche categories like man-made fibre bras, Bangladesh was paid considerably less, with exporters earning $3.19 per unit compared to Vietnam's $6.06.

Only two Bangladeshi products -- women's cotton trousers and men's cotton T-shirts -- were sold at slightly above the global average.

Women's cotton trousers earned $6.43 apiece, exceeding the world average of $5.22 by 23.3 percent, while men's T-shirts fetched $1.47, roughly 23.1 percent higher than the global benchmark.

Still, these figures were dwarfed by the earnings of countries like Turkey and Peru, which received up to four times more for similar items.

According to the ITC, which has a joint mandate with the World Trade Organization and the United Nations, these pricing gaps represent an entrenched imbalance in the global supply chain.

Industry insiders say Bangladesh's quality has improved, but its bargaining power remains weak.

RETAILERS CITE HIGH OPERATIONAL COSTS

Ehsan, owner of Fatullah Apparels, said jackets and outerwear produced in Bangladesh, often sold to retailers at FoB prices ranging from $20 to $25, regularly appear in stores for $100 to $110.

He added that some of the world's richest individuals have built their fortunes in fashion retail, with Bangladesh as a key production hub.

The profit chain often stretches beyond the retailers themselves.

Md Fazlul Hoque, managing director of Plummy Fashions Ltd, pointed out that a significant share of Bangladesh's garment exports is managed by intermediaries or third-party importers, who also take a cut before the goods reach retail shelves.

"Sometimes we sell a T-shirt at $3.50, and it ends up in a branded store for $39," Hoque said. "Of course, it doesn't stay at that price forever -- discounting comes in later, but the markup is still substantial."

He added that while pricing can vary across seasons and product categories, the general rule of thumb remains: most garments are sold at three to four times their FoB value.

However, a European retailer, on condition of anonymity, disputed the claims of excessive markups. "Those suggesting a substantial markup on Bangladeshi garment items are gravely mistaken," he said.

"In the garment supply chain, a European retailer must rent large warehouses to store goods, which is quite costly," he said, adding that transportation expenses also factor in.

"Renting retail space is another major expense, and ultimately, retailers and brands can sell, at best, 70 percent of the goods from a single consignment," he said. "Once the season ends, unsold items can no longer be offered to customers."

The retailer said that European companies pay higher wages than their Asian counterparts, which also affects profit margins. "Ultimately, European retailers earn less than 10 percent profit annually. The claims of high markups are exaggerated."

CALL FOR FAIR PRICING

Apparel industry advocates and multilateral organisations are increasingly urging retailers to adopt more equitable pricing models.

The ITC noted in its report that while apparel manufacturing has grown more complex, involving design, logistics, and branding, the actual cut-and-sew operations, which remain concentrated in countries like Bangladesh, continue to be the least rewarded.

Khondaker Golam Moazzem, research director at CPD, said that China and Vietnam are getting higher prices for their garments by utilising diverse fabrics and innovative product designs, despite sharing the same HS codes as Bangladesh.

In contrast, Bangladesh's garment exports are heavily reliant on just five or six products, accounting for 70 percent of its total exports. This concentration creates unhealthy competition, tempting local exporters to undercut prices, said Moazzem.

He also pointed out that the industry's heavy dependence on cotton and limited use of man-made fibres are also obstructing better prices.

"Bringing in more foreign investment could be a viable solution, as foreign investors usually have access to upmarket buyers and advanced technologies," said the CPD research director.​

 

[Saif]

RMG export to EU rises 29% in Jan-Mar

Bangladesh shipped $5.98 billion worth of apparels to the EU in the first three months of 2025

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RMG export to EU rises 29% in Jan-Mar
Bangladesh shipped $5.98 billion worth of apparels to the EU in the first three months of 2025

Bangladesh's apparel exports to the European Union surged by 29 percent in the first three months of 2025.

The South Asian country shipped garments worth $5.98 billion to the EU in the January–March period of 2025, up from $4.63 billion in the same period of 2024.

Moreover, garment export volume to the destination also rose by a strong 24.64 percent, along with a 3.55 percent increase in unit price, according to data from Eurostat, the statistical office of the European Union.

The rise in export value, volume, and unit price indicates balanced growth in amount, quantity, and price in the EU market, the data said.

In the January–March period of 2025, the EU saw a significant surge in apparel imports, with growth of 16.84 percent, totalling $24.65 billion.

This increase was accompanied by a notable 20.25 percent spike in volume and a 2.84 percent decrease in average unit prices.

China, India, Pakistan, and Cambodia also experienced substantial growth in the same period.

China's apparel exports to the EU reached $6.67 billion in January–March 2025, up from $5.34 billion in the same period of the previous year.

However, Turkey faced a 4.14 percent decrease in apparel exports to the EU, totalling $2.37 billion in January–March 2025, while Vietnam recorded 18.09 percent growth, reaching $1.14 billion in exports.

India, Pakistan, and Cambodia secured $1.44 billion, $1.08 billion, and $1.16 billion respectively from the EU clothing market during January–March 2025.​