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Bangladesh top denim exporter to US in first half of 2022

Black_cats

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Bangladesh top denim exporter to US in first half of 2022

This was a 57.06% year-on-year (YoY) growth from the same period of 2021

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Mahmud Hossain Opu/Dhaka Tribune
Saddam Hossain
August 11, 2022 7:28 AM

Bangladesh’s dominance continued throughout the first half (January-June, or H1) of this year as the market leader in denim apparel to the United States, shipping goods worth $445.5 million.

This was a 57.06% year-on-year (YoY) growth from the same period of 2021, according to recent data from the Commerce Department’s Office of Textiles and Apparel (Otexa).
In the same period last year, Bangladesh exported denim apparels worth $283.64 million in the North American country, Otexa data stated.

denim-export-to-the-us-in-h1-22.jpeg

The US imported denim apparels worth $2.05 billion during the first half of 2022 from global suppliers, noting a significant increase of 42.62% on a YoY basis, from $1.43 billion in the same period last year, data also revealed.

In 2021, Bangladesh had become the top denim exporter to the US for the second consecutive year.

Currently, Bangladesh holds 22.36% market share of the US denim market as the market leader.

According to RMG insiders, Bangladesh is still on the right track to remain a market leader for denim apparel, amid the global crises induced by war and inflation in the West and disruptions in the supply chain.

They also said that Bangladeshi denim is the biggest brand in the US market as US buyers consider it an elite product of high quality, hoping Bangladesh will remain the top denim exporter to that market for a third consecutive year by the end of 2022.

Along with Bangladesh, all major denim apparel shippers witnessed an increase in their respective shipments to the US market, namely Mexico, Pakistan, Vietnam, China, and Egypt.

Securing second position, Mexico experienced significant progress and shipped $362.02 million worth of denim garments to the US, registering a growth of 26.46% YoY from $286.26 million in H1 '2021 with a market share of 17.02%.

With an 11.21% market share, Pakistan exported denim apparel worth $242.76 million registering a 60.8% yearly growth in the US market during the first six months of 2022, from $150.97 million of the same period last year.

Vietnam was fourth, exporting $217.98 million worth of denim with a 44.57% growth from $150.77 million of the same period last year, and a market share of 10.94%.

China shipped $188.45 million worth of denim garments – up by 26.42% - from last year’s $148.9 million, with a market share of 9.95%, Otexa data said.

Regarding the dominance in the US market, Mohiuddin Rubel, deputy managing director of Denim Expert Limited and also a director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Dhaka Tribune that denim was one of the most prominent sectors within Bangladesh's RMG industry.

“In the past decade, the denim industry in Bangladesh has developed significantly through quality products, competitive price, resilience, and environment-friendly manufacturing process which made us the top denim import source for the USA,” he added.

Bangladesh has made huge investments in the denim industry particularly, in the local denim sector, which is more than $1.39 billion and a strong backward linkage industry that covers almost 50-60% of denim productions through local fabrics, design studios and 40 world-class denim manufacturer mills.

“Bangladesh is now able to deliver denim orders very fast, which is also a positive sign for buyers,” he said, adding that apart from basic five-pocket denim, Bangladesh was manufacturing high-end fashionable denim products with value additions.

Moreover, since 2014, Bangladesh Denim Expo plays a crucial role in the growth of the Bangladesh denim Industry by promoting sustainability, transparency, innovation, circularity, and responsible manufacturing process, he added.

“Bangladesh has made huge investments in both backward and forward linkage industries for Denim. We believe that we will continue to be the top denim source for the USA if we can maintain the competitiveness of our industry,” he added.

Regarding the current issues, he said that the global economy and trade show a depressing outlook ahead which is a concern for the apparel industry.

“According to the World Bank, the global economic growth will come down to 4% in 2022 from 10.3% in 2021,” he added saying that the annual inflation rate in USA rose to 8.5% in July and in the Eurozone, it hit a record 8.9%,” Rubel further said.

The risk of an economic recession is also increasing in those countries, he feared.

“Our government is doing its best to protect our economy. The positive side is that exports kept positive momentum and remittance growth recorded, and through all the measures imports will also be under control,” he added.

 

Bilal9

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Whenever I read articles like this, I am struck with heavy doses of envy. Whatever BD does, India can and should have done and on an bigger scale, if it had got its act together.

Regards

No envy required. Bangladesh is buying plenty of yarn and cotton from India (and Pakistan as well) and adding value by processing these items. Indian value added yarn helps India earn foreign exchange. It is an eco-system which is win-win for everyone.
 

SoulSpokesman

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Bilalbhai,

Bangladesh is buying plenty of yarn and cotton from India and adding value by processing these items. Indian value added yarn helps India earn foreign exchange. It is an eco-system which is win-win for everyone.

Not grudging at all. But it is more complex than that. It goes like this. If you export cotton you get $1. If you convert it into yarn you get about $2, but if you convert it into fabric and finally RMG you get at least $5. (Of course there are costs as well). So India could be exporting close to 2-3 times textiles as it already is. In addition you generate tax revenues for the government.

But there is something beyond just that. Of the $4 value addition you are getting almost half of that is labour cost aka employment- more importantly employment to relatively unskilled people, large number of them women from poorer socially disadvantaged groups. That, my dear friend, has a transformational impact which goes far beyond just earning dollars.

Regards
 
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Bilal9

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Bilalbhai,

Bangladesh is buying plenty of yarn and cotton from India and adding value by processing these items. Indian value added yarn helps India earn foreign exchange. It is an eco-system which is win-win for everyone.

Not grudging at all. But it is more complex than that. It goes like this. If you export cotton you get $1. If you convert it into yarn you get about $2, but if you convert it into fabric and finally RMG you get at least $5. (Of course there are costs as well). So India could be exporting close to 2-3 times textiles as it already is. In addition you generate tax revenues for the government.

But there is something beyond just that. Of the $4 value addition you are getting almost half of that is labour cost aka employment- more importantly employment to relatively unskilled people, large number of them women from poorer socially disadvantaged groups. That, my dear friend, has a transformational impact which goes far beyond just earning dollars.

Regards

All good points.

But what are you going to do?
  • The investments that Indian businesses needed to make to modernize apparel production (AND backward linkage industries) were never made. Bangladesh did this. All carding, spinning, weaving infra is very new and is very efficient as a result.
  • The removal of red tape in Indian labour law never materialized. Red tape is far less on our side. Unionization is banned.
  • Labor rates in India are twice or more than Bangladesh. And on Bangladesh side there is plenty more where THAT came from.
  • Plus upper middle class Indian people look down their noses at apparel and shoe production (Chaddi...etc.). Bangladeshis have no such mentality.
Thus Indian exporters became uncompetitive. Govt. is happy in India providing subsidies to some sectors.

Water under the bridge....in any case - we are not discussing India situation here and I am no expert on India.
 

SoulSpokesman

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Bilalbhai,

What you are writing is absolutely correct. I am not saying that India will do it now. I am saying that with a different sets of leaders and different priorities it could have been done; and I wouldn't rule it out even now. In fact, if you look at Tiruppur example it is very much doable. A large thriving export hub which exports USD 4 billion of hosiery products, without a huge amount of govt support, in one of the most expensive states of India and based on 300K plus labour drawn from more than a thousand miles away.

The removal of red tape in Indian labour law never materialized.

There are certain states such as GJ and MP which have substantially revamped their labour laws. As you can see for yourself GJ is one of the biggest players in the diamond cutting and ship breaking industry which is equally labour intensive.

Labor rates in India are twice or more than Bangladesh. And on Bangladesh side there is plenty more where THAT came from

True for India as a whole. But there are large parts of India where labour rates are comparable to BD- WB, Bihar, Eastern and Central UP. These regions also have large weaver communities, mainly Muslims, who can easily be moved into the textile business. Problem of course is that the social system and governance in these regions is abysmal.

Plus upper middle class Indian people look down their noses at apparel and shoe production (Chaddi...etc.).

That is true but immaterial. India has banyas who are famously willing to make money in any business (you may not be aware of this but there are banyas and Jains involved in meat business as well), there are millions of very poor people who will migrate to textile factories.

Regards
 

Bilal9

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Hmmmn wearing a shirt from Bangladesh at the moment... comfy!

I get a few polo shirts every year from an apparel factory owner friend.

Ten years ago those freebies were Walmart quality.

I was surprised when I got the batch this year. The textile quality, the sewing and the finish was superior to Brand-name stuff one would find at upmarket stores like Macy's, more like Nordstrom's. Gucci and Burberry territory....

 

James David

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I was surprised when I got the batch this year. The textile quality, the sewing and the finish was superior to Brand-name stuff one would find at upmarket stores like Macy's, more like Nordstrom's. Gucci and Burberry territory....
The wife bought me about five. Been wearing them all the time like wash and wear. It's comfy which is the main reason I wear em, it makes the wife feel it's my favorite. :yahoo:win win scenario!
 

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