Bangladesh’s ready-made garments and accessory materials packaging export industry gets its first taste of the cold winter
The crisis faced by Bangladesh’s textile and garment industry in the past two months (September and October) has also recently had an impact on other processes in the garment supply chain. In September, garment exports fell by 7.52% year-on-year, the first negative growth since August 2021. Fortunately, the settlement growth of 3.27% in October reversed the trend of still declining by 19% on October 20. Nonetheless, the first vice president and other members of the Garment Manufacturers and Exporters Association said that his company’s production capacity has declined by 30% in the past two months, and the situation is expected to continue until January 2023. According to most industry estimates, exports in October should decline is declining. In order to reduce the pressure of inventory accumulation, many businesses require buyers to ship goods as scheduled but agree to delay payment.
According to the Bangladesh Export Promotion Bureau, the country’s total exports from July to October 2022 were US$16.85 billion, a year-on-year increase of 7.01%, of which ready-made garment exports were US$13.95 billion, a year-on-year increase of 7.01%. An increase of 10.55%.
The local garment accessories and packaging industry can supply more than 95% of demand. As the main supporting industry for the garment industry, it has borne the brunt of this crisis, with work orders significantly reduced by 30-40%. . The president of the Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) said that in addition to a sharp drop in orders of at least 35-40%, manufacturers also delayed payments because buyers requested delayed shipments.
Generally speaking, it usually takes 7 working days for banks to issue a maturity letter for exports. However, currently, in most cases, sub-material suppliers must Wait 45 days and still not receive bank payment even after 120 days. BGAPMEA currently has more than 1,800 registered members, producing more than 25 types of products, with an export value of US$7.25 billion in 2021/22.
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