After long three decades of business experience, now Bangladesh is the 2nd largest garment exporter in the world, and this was possible due to efficient backward linkage support especially from yarn manufacturing or spinning industry. However, in Bangladesh, mills have to purchase the cotton in foreign currency i.e., dollar. Transportation cost also plays a significant role on the selling price. Inventory cost for the BD spinning industry is also high. Bank interest rate is also creating impact on the selling price of yarn. Furthermore, gas price has been doubled in the recent times. For this reason, unit production cost of cotton yarn has been increased around 8 %. The world’s fashion industry is badly impacted by the Ukraine Russia war. Due to piling up of old stock at buyers end and high inflation in western economy buyers are asking for discounted prices. Worker wages are also going to be increased within a very short time. As a result, in recent times, the cotton spinning industry is facing loss at the rate of 40 to 50 cents per unit. But how long they can continue in this way is a matter of great concern at this moment. The cotton spinning industry is facing great challenges to sustain its business. On the other hand, cotton-based garments export will be greatly hampered if the backward linkage cotton spinning industry can’t provide the support. Garments exporters will also have to maintain an inventory of at least 3 or 4 months if they import yarn from abroad which is not a good or sustainable idea for them.
Keeping a side of all these obstacle, according to the Export Promotion Bureau (EPB) has recently released country-wise export data for July-April period of FY 2022-23. During this period, the total apparel exports grew by 9.09 percent over the same period of the previous year and the total exports reached $38.57 billion. According to EPB data, among these apparel exports, $19.20 billion worth of garments went to the European Union (EU) which is 49.78 percent of the total exports. $6.9 billion worth of apparel was exported to the US market, accounting for 18.01 percent of total exports. Canada accounted $1.2 billion in apparel exports which is 3.19 percent and $7 billion in exports to non-traditional markets, which is 18.16 percent of total exports. During the period under review, exports to the EU increased by 8.58 percent compared to the same period in FY 2021-22. Among the EU region’s main markets, exports to Germany fell by 7.33 percent to $5.53 billion compared to the same period last year. Apparel exports to France and Spain were $2.40 billion and $2.95 billion respectively and the growth was 22.21 percent and 16.69 percent respectively. Italy also had a positive growth trend of 42.40 percent and reached $1.85 billion. On the other hand, exports to Bulgaria and Poland showed a negative growth of 46.43 percent and 17.59 percent year-on-year respectively. However, exports to the US registered a negative growth of 7.13 percent during July-April of FY 2022-23. Moreover, exports to both the UK and Canada markets saw a positive growth of 10.88 percent and 16.09 percent respectively. In July-April of FY 2022-23, Bangladesh’s garment exports to non-traditional markets increased by 30.80 percent and reached $7.00 billion. Among non-traditional markets, our exports to major markets like Japan, Australia, India and South Korea were $1.32 billion, $961.30 million, $889.06 million and $477.81 million respectively.