Apparel exporters fear lower order amid global inflation
Bangladeshi garment exporters fear a drop in orders due to rising global inflation caused by crises including the ongoing war between Russia and Ukraine.
“We are already feeling the pressure of inflation. Some buyers have started to postpone orders because in such a situation people will spend mostly on food and buy a little less on clothes,” said Faruqe Hassan, President of Bangladesh. Garment Manufacturers and Exporters Association (BGMEA), during a press conference at a hotel in the capital on Saturday.
“We informed our members about the issue so that they keep it in mind,” he said during the press conference held to unveil the logo of the “Made in Bangladesh Summit 2022” and to highlight light the details of the 37th World Fashion Convention. should be held in Dhaka in November.
He said the Russian-Ukrainian war had led to higher food and fuel prices, as well as fears of recession in some parts of the world, including Europe.
“Inflation is rising sharply around the world, which could affect the demand for clothes and people’s purchasing power in the international market. This is a source of concern for us,” Faruqe said.
Inflation has recently become severe in major export destinations of Bangladesh, including Europe and America. Inflation in some of these countries is the highest in decades. For example, the United States now has the highest inflation rate in four decades.
A number of apparel entrepreneurs also reported a slowdown in clothing purchases due to inflation and the ongoing Russian-Ukrainian war.
Fazlee Shamim Ehsan, managing director and CEO of Fatullah Apparels, told The Business Standard: “Two European buyers have suspended their orders.”
Despite significant growth in apparel exports in recent months, the sector has faced a number of challenges.
“Entrepreneurs are struggling to survive in the face of rising production costs, supply chain challenges, raw material crisis, rising fuel, gas and electricity prices and a strong increased shipping costs,” the BGMEA chairman said.
As the prices of raw materials have risen sharply, the cost of producing garments in Bangladesh has also risen. Recently, the price of clothing has increased a bit, but exporters are still struggling to get a fair price for their products.
At the opening ceremony of the Sustainable Clothing Forum held recently in the capital, Faruque Hassan said that the cost of producing clothing has increased by 30% over the past five years.
However, at yesterday’s press conference, the BGMEA Chairman expressed hope that Bangladesh’s current share in the global apparel market will increase from 7% to 10% in the next three years and half if export-oriented policies including trade facilitation, stable taxation and tariff policies have been adopted.
“We expect our global market share to exceed 7.5% in 2022 and 10% by 2025,” he said.
Faruque Hassan also said it would be difficult for the apparel industry to achieve the desired growth by following the model it has followed for the past four decades.
He said the country should focus on synthetic fiber clothing rather than cotton-based clothing and demanded government incentives for cotton-free clothing.
Made in Bangladesh Summit in Dhaka in November
“Made in Bangladesh Summit” organized by BGMEA, the largest ever event in the garment industry in the country, will be held in Dhaka in November this year.
Meanwhile, the International Apparel Federation will hold the 37th IAF World Fashion Convention in Bangladesh for the first time.
Meanwhile, many other programs held here will become a gathering place for buyers, brands, suppliers, fashion icons.
Responding to a question at the press conference, the BGMEA chairman said government guidance and cooperation from buyers is needed to keep the Bengali information in the garment price tag.
“We hope that with the cooperation of all parties, it can start from January next year,” he said.
On the show, IAS General Secretary Matthijs Crietee hailed the progress of the garment sector in Bangladesh over the past few years.
“Perhaps more than ever before, apparel manufacturers are playing a pivotal role in the industry transformation that we all need,” he said.
“Thus, on the international stage presented by the 37th IAF World Fashion Convention, the Bangladeshi garment industry will show itself as a source of solutions to today’s major industry challenges.”