CPD finds Bangladeshi garment value falls sharply in comparison with Vietnamese

In keeping with a research by the Centre for Coverage Dialogue (CPD), Bangladeshi readymade (RMG) gadgets have seen a sharper fall in costs in comparison with the Vietnamese merchandise within the European Union and US markets.

The worth of 100 kg of made-in-Bangladesh cotton fibre T-shirt dropped by 1% year-on-year to 1,091.5 euros in 2020.

Whereas the CPD research discovered that the identical class product manufactured in Vietnam noticed a 3% value rise, reaching 2,157.9 euros final yr.

Equally, the value of every 100 kg of ladies or ladies’ cotton fibre pullover made in Bangladesh lowered by 7 p.c year-on-year to 1,329.5 euros in 2020 whereas the value of the Vietnamese ones remained unchanging at 2,157.8 euros.

The costs of every 100 kg of Bangladeshi man-made fibre pullovers for girls and ladies fell by 6 p.c to 1,319.4 euros from 1,409.6 euros in 2019 on the EU markets. Nonetheless, the Vietnamese variant has seen solely a 3 p.c year-on-year value fall, hitting 1,906.2 euros in 2020.

Within the US market, the value of a dozen of Bangladeshi T-shirts created from cotton fell by 20 p.c to $17.99 in 2020 from $22.43 in 2019 whereas the value of the identical product made in Vietnam dropped by 17 p.c to $31.9 in 2020 from $38.2 in 2019.

The value of a dozen of Bangladeshi made sweaters and pullovers dropped by 2 p.c to $39.31 in 2020 from $40.23 in 2019.

However, the costs of the identical Vietnamese product remained secure at $47.1 in 2019 and 46.9 in 2020.

The value of a dozen of Bangladeshi made trousers for girls and ladies created from cotton fibre dropped by 12 p.c to $64.17 in 2020 from $72.88 in 2019 whereas its Vietnamese variant has seen solely a 6 p.c value fall, reaching $84.6 in 2020 from $90.5 in 2019.

Bangladesh’s attire export efficiency was pushed by each quantity and worth components, in keeping with the CPD research. Trade fee administration is rising as a significant issue, driving export competitiveness, CPD mentioned.

The CPD additionally mentioned the export goal set for fiscal 2021 to attain 21 p.c development over fiscal 2020 is not going to be achieved.

It is going to take a while to even attain the pre-COVID export stage of $40.5 billion.

Knitwear has carried out higher within the July-January interval of FY21 (+3.8%) in comparison with Woven put on (-10.9%).

Jute and jute items (+27.1 p.c) and residential textiles (+44.3 p.c) have posted sturdy development.

The worldwide demand for artifical fibre attire and artificial leather-based merchandise are rising at a quick tempo.

There’s a have to revisit the inducement regime given new export merchandise and export market dynamics, the CPD mentioned in its State of the Bangladesh Financial system in FY20-21.

The commerce stability additional weakened in FY2020 with a sooner fall in exports (-16.9 p.c) in comparison with fall in imports (-8.6 p.c).

Nonetheless, the situation reversed in FY2021, when over the primary half of the fiscal yr, imports fell at a sooner tempo (-6.8 p.c) than exports (-1.1 p.c), resulting in some enchancment within the commerce stability.

Because of the continued sturdy circulation of remittances, the stability of funds place on the finish of the primary six months of FY2021 in December 2020 exhibits vital enchancment.

Nonetheless, the general situation hides a various vary of undercurrents and lots of narratives, with the extent of export earnings reducing, continued gradual efficiency in case of import funds and the backdrop of continued wholesome efficiency of remittances, the CPD research mentioned.

Rubana Huq, president of the Bangladesh Garment Producers and Exporters Affiliation (BGMEA) lately mentioned, “So far as the forecast of ‘optimistic development’ is anxious, we would want to calculate the expansion of 2021 based mostly on the export figures of 2019 since 2020 was an irregular time to check export.”

She added that it’s powerful to forecast the way forward for our exports within the backdrop of the current unstable scenario however issues could keep difficult for us no less than until the three^rd quarter of this calendar yr.

“It’s not the export market and demand solely which is able to decide the efficiency of export, however the worrying monetary scenario of the factories right here is to be factored in to evaluate how lengthy it will be attainable for particular person enterprises to resist the extended shock,” Huq added.

Huq additionally mentioned that the clothes sector has had a consecutive downturn in export in December by 9.64 p.c, which wrapped up the annual export efficiency for 2020 with an unprecedented fall of 16.94 p.c.

In December of 2020, woven garment export posted the worst efficiency since June 2020, because it dropped by 18.07 p.c.

Because of the demand for attire for house use, the knitwear export managed to have a relatively secure place with -0.45 p.c development in December.

Whereas wanting on the two years’ development, it exhibits that development between October 2018 and 2020 was -26.03 p.c, and November 2018 and 2020 was -14.32 p.c.

“The two years change in export for December is -8.55 p.c, which means that we exported 8.55 p.c much less in December this yr in comparison with what we exported in December 2018,” Huq added.

“So, given the impact of lockdowns in Europe and the USA and their impression on retail and demand, the worst ever Christmas gross sales the world has seen, and most of all of the impact of value decline, which is round 5 p.c since September 2020, it was a darkish yr for the business,” she mentioned.

Because the doubts and stresses attributable to the second wave persist coupled with the comparatively poor administration and unavailability of a vaccine, and the impression on the worldwide economic system it will go away, this downtrend in export will most likely proceed until April of this yr, mentioned Huq.