Bangladeshi apparel products are losing orders over safety and compliance issues imposed after Rana Plaza tragedy and Tazreen Fashion fire incident. The declining trend is apprehended to be continued in the months to come unless measures are taken to boost up buyers' confidence.
Apparel exports are losing edge in the US market to its competitors namely Vietnam, Cambodia, India and Indonesia, as buyers have started cutting back their orders. For the seven months in a row, the country's ready-made garment exports to US slipped while the Vietnam, Cambodia, India and Indonesia saw strong double-digit growth, according to the latest figures from the US Department of Commerce's Office of Textiles and Apparel (OTEXA).
US apparel imports from Bangladesh continue to shrink, but surged 9.77% from all sources in September to 2.57bn square metre equivalents (SME). Among the top ten supplier countries, shipments from China grew 12.4% to 1.3bn SME year on year, and were 7.4% higher than August. Vietnam's upward performance accelerated even further in September -- jumping 23.4% to 254m SME compared to a year ago, and 1.2% higher than August.
While the two largest apparel suppliers to the US continued their upward trajectory, the picture remains worrying for Bangladesh, which sits at number three in the top-ten league table. Imports from the country, which has been hit by issues around worker and factory safety in the last year, fell 11% to 111m SME in September.
This is the seventh consecutive month of decline this year for Bangladesh, having started its fall in February, just a month before Alliance, a platform of 27-US based retailers and brands formally started safety checks. Indonesia, meanwhile, rebounded from its 4.4% decline in August to post a 17.1% year -on-year gain in September, reaching 86m SME.
Cambodia remained flat at 113b SME, an improved performance from its 9.6% year-on-year drop in August. When it comes to imports from the US's other largest suppliers, year -on-year gains were posted during September by Honduras (up 8.8% to 105m SME), India (up 10.9% to 67m SME) and Mexico (up 1.1% to 74m SME).
Buyers are continuing to wait for the inspection report of Alliance, hitting RMG export to US market , said former BGMEA president Anwar-ul- Alam Chowdhury. Alliance already completed safety assessment of garment factories in Bangladesh and found less than 2% structural faults of the factories in October.
This message is yet to reach to the American buyers who want certified copy, supposed to be issued by the Alliance, for those factories free from fault. Chowdhury also feared that export shrinking might be continued unless measures were not taken to bring back buyers confidence. Dark clouds are hovering over the country's economic backbone, the RMG which makes up around 80% of total merchandise exports from Bangladesh.