Bangladesh is close to surpassing China as the world’s largest cotton apparel exporter and stronger demand prospects are expected to drive cotton consumption higher, said the US Department of Agriculture (USDA).
According to the study, US fashion companies have attempted to reduce their sourcing from China, the largest apparel exporter, by reallocating sourcing orders to markets, including Bangladesh, to minimise logistical and political risks.
USDA gave the information in a report published recently citing the United States Fashion Industry Association’s (USFIA) annual Fashion Industry Benchmarking Study that listed factors supporting even stronger future apparel export prospects.
“Bangladesh, India, and Vietnam were the three suppliers that retailers plan to increase sourcing from over the next 2 years to divert orders away from China. The USFIA study also indicated that Bangladesh is the most competitive apparel supplier from a cost structure point of view, scoring higher than any other country,” the report said.
The USDA said, “The Export Promotion Bureau of Bangladesh is targeting more than $50.0 billion of apparel exports in FY2024, slightly higher than the previous fiscal year and proof that the government foresees greater demand.”
“Spinning mills’ operating rates in 2023-24 are expected to rise as the textile supply chain replenishes depleted stocks of yarn, fabric, and apparel; this past marketing year witnessed textile manufactures destocking and maintaining low inventories across the supply chain.”
“2023-24 Bangladesh cotton consumption is forecast up 800,000 bales to 8.0 mn and owed to burgeoning apparel exports. Practically all cotton yarn (i.e., cotton consumption) is sold domestically to the country’s robust fabric and apparel sectors.”
“Apparel exports are pivotal to Bangladesh’s economic growth and stabilising the value of the domestic currency, specifically by obtaining US dollars through foreign sales,” the report added.
It mentioned that the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) reported that apparel accounted for over 80 percent of the country’s total exports in fiscal year (FY) 2023 (June 2022 – July 2023) at roughly $47.0 bn, more than double the value one decade ago.
“This value surpassed the previous year’s record and indicates global importers’ increasing preference for Bangladesh cotton products.”
“Exports of knit apparel have been crucial to recent growth with a value that nearly tripled over the past decade. According to the Bangladesh Textile Mills Association, local textile mills meet 85 percent of the demand for knit fabrics and about 40 percent for woven fabric, which is mostly imported from China.”
“Knitted cotton shirts and sweaters have been major products helping drive recent record high values. Growing apparel exports to the world’s largest importing markets, the United States and European Union, are particularly evident with record volumes of Bangladesh cotton apparel in 2022. “