The Future of Apparel Exports in Bangladesh and Vietnam seems quite optimistic. Both governments are showing a strong commitment to supporting the sector, which is a positive signal for the future. This focus on the garment industry bodes well for the growth and development of the export market in these countries.
Insight of Future of Apparel Exports in Bangladesh and Vietnam
Bangladesh’s Apparel Export: A Projected Rise to $56 Billion by 2026
In an era of dynamic global trade, Bangladesh’s apparel export sector is poised for substantial growth, projected to reach $56 billion by 2026. CAL Bangladesh anticipates this surge, attributing it to a shift in apparel orders from China and the expansion of the Man-Made Fiber (MMF) segment. Despite challenges such as increased production costs due to rising gas prices, Bangladesh is expected to maintain a compound annual growth rate of 5.3 percent from 2023 to 2026. The report underscores the resilience of the country’s apparel sector during global economic downturns.
Factors Influencing Bangladesh’s Apparel Export Growth
On the positive side, the decline in global cotton rates, fueled by reduced consumption, coupled with a significant correction in freight rates, is anticipated to mitigate the costs of raw material imports. However, challenges loom on the horizon for 2023. The report suggests that major apparel markets will impose downward pressure on local apparel exports. Inflation is expected to drive wage rates higher, squeezing profit margins. Companies in Bangladesh with high fixed-cost structures may experience a notable reduction in their bottom line. Simultaneously, entities with high debt exposure and substantial inventory, especially of cotton with lowered prices, are likely to face challenges in the coming year.
Vietnam’s Garment Sector: Optimism Amidst Increasing Textile Activities
Across the border, Vietnam’s textile sector paints an optimistic picture for 2023. The Vietnam Textile and Apparel Association (VITAS) foresees a surge in textile exports, reaching an estimated $45-47 billion this year. This positive outlook is driven by growing export orders and interest from Western buyers. The anticipation is that the apparel market will recover by the end of the year, triggering a subsequent rise in orders. VITAS Chairman, Vu Duc Giang, attributes Vietnam’s status as a preferred sourcing destination to advanced programs in sustainable development, green initiatives, and circular economy practices. Notably, many brands are returning in significant numbers, prompting companies to resume production after the extended Lunar New Year holidays.
Efforts to Boost Vietnam’s Textile Sector
The Garment 10 Corporation in Vietnam exemplifies this upward trend. With 12,000 workers returning to work, the corporation aims for an ambitious export target of $190 million in 2023. In response to the increased demand, the corporation plans to add another 800 workers to its production facility. Simultaneously, the textile sector in Vietnam is actively working to reduce dependence on imports and increase the utilization of domestic raw materials. VITAS reports that the localization of garments and textiles in Vietnam has increased to 49 percent, with entrepreneurs aiming to raise this figure to 55 percent by 2025.
Conclusion: Navigating the Future of Apparel Exports in Bangladesh and Vietnam
As Bangladesh and Vietnam chart their courses in the global apparel trade, both face a unique set of challenges and opportunities. Bangladesh’s projection of $56 billion in apparel exports by 2026 signifies its resilience and adaptability. Meanwhile, Vietnam’s positive outlook reflects its commitment to sustainable practices and a rebounding market. Both countries are navigating the complex terrain of global trade dynamics, showcasing the intricate interplay of economic factors, market trends, and industry initiatives. The Future of Apparel Exports in Bangladesh and Vietnam unfolds as a canvas where these nations continue to contribute significantly to the world of apparel exports.
Despite there are issues in both the country’s in Bangladesh the wages issues and in Vietnam the shortages of exports order is a bit of concern but things will get sorted out soon. For more on Bangladesh wages issue click here or GO
1 thought on “Prospects and Challenges: A Glimpse into the Future of Apparel Exports in Bangladesh and Vietnam”