Bangladesh's apparel exports to the US stood at $9.72 billion in 2022, Bangladeshi media reported on Tuesday.
The data also showed that the country's total apparel imports declined by 22.04% year-on-year to $77.84 billion, compared to the import value of $99.86 billion in the previous year.
Moreover, in terms of volume, Bangladesh's RMG exports to the US in 2023 witnessed a significant decline of around 28%, falling to 2.25 billion square meters from 3.13 billion square meters in 2022, according to the Otexa data.
US Imports Face 22% Decline in 2023 Amid Inflation and Anti-Russia Sanctions
Against this backdrop, Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association, told Sputnik India that "in 2023, the US saw a decline of over 22% in imports compared to 2022". This decline is mainly due to high inflation driven by the US and exacerbated by anti-Russian sanctions, which have hurt Bangladeshi businesses and led to various challenges, he noted.
At the same time, Hassan mentioned that "in response to inflationary pressures, the US implemented a monetary policy to control the situation, which led to an increase in interest rates. As a result, interest rates affected various markets and instalment rates, which affected the affordability of goods".
The dwindling trend in Bangladesh's Ready-Made Garments (RMG) export to the US, Dr. Selim Raihan, Executive Director of the South Asian Network on Economic Modeling (SANEM) told Sputnik India, “that is primarily ascribed to two significant factors: Firstly, due to the high level of inflation, which has impacted consumer expenditure, particularly on elastic goods such as clothes. This inflationary trend has had adverse effects on Bangladesh's RMG export performance in its conventional markets”
Bangladesh's RMG Exports Expand to Non-Traditional Markets in 2023
“Secondly, it's crucial to highlight another noteworthy factor: in a positive development, Bangladesh's RMG export landscape has shown some degree of diversification in 2023. There has been a notable 20.54% year-on-year growth in apparel exports to non-traditional markets, marked by robust expansion in countries such as Russia, and others. This has ultimately contributed to an overall record growth in RMG exports for 2023” said Raihan.
In particular, European countries, which had previously purchased oil and petroleum products from Russia, "shifted their focus to the Middle East - as a result, Bangladesh, which had to source these items from the Middle East, faced higher costs, especially with increased freight costs in 2022. The overall impact has been felt globally, affecting the global economy."
“In this scenario, countries such as Bangladesh are suffering due to these Western sanctions”, said Hassan
Rahian concluded by stating that “Bangladesh has the potential to expand its share in non-traditional markets in the coming days”.
Similarly, Vietnam and India will see their apparel exports to the US fall by 22.29% and 21.42% respectively in 2023.