[🇧🇩] Textile & RMG Industry of Bangladesh

[Saif]

Bangladesh set to remain world’s top cotton importer in MY26

Bangladesh is on track to retain its status as the world’s biggest cotton importer in the marketing year (MY) 2025-26, with imports projected to reach 8.5 million bales, according to a record-setting forecast by the United States Department of Agriculture (USDA).

www.thedailystar.net

Bangladesh set to remain world’s top cotton importer in MY26

Bangladesh is on track to retain its status as the world's biggest cotton importer in the marketing year (MY) 2025-26, with imports projected to reach 8.5 million bales, according to a record-setting forecast by the United States Department of Agriculture (USDA).

Vietnam is set to follow closely with 8 million bales, marking an all-time high for both countries, as per the USDA's latest Cotton: World Markets and Trade report.

The report highlights a modest rebound in global cotton consumption, which is expected to hit a five-year high of 118.1 million bales. This resurgence is attributed to stable economic activity, particularly in major textile-exporting countries such as Bangladesh and Vietnam.

For Bangladesh, the surge in cotton imports reflects the continued expansion of its ready-made garment (RMG) industry — the backbone of its export economy.

In the first 10 months of FY25, Bangladesh's RMG exports grew 10.86 percent year-on-year to $30.25 billion, according to Export Promotion Bureau (EPB) data.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said Bangladesh's decision to import more cotton from the US is part of a broader strategy to reduce the trade gap between the two countries.

He noted that the record volume of cotton imports would also strengthen Bangladesh's case for securing duty-free access for its RMG products in the US market.

"The government has already taken necessary initiatives in this regard," Hatem said.

He further stated that US cotton is considered the best in the world in terms of quality and consistency, making it the preferred choice for local spinners and manufacturers.

"With global buyers increasingly prioritising sustainable sourcing and natural fibres, cotton remains a vital raw material for Bangladesh's spinners and knitwear producers," Hatem added.

He viewed the USDA's import forecast as a strong endorsement of Bangladesh's capability to maintain and expand its leadership in the global apparel value chain.

The global cotton trade is also forecast to rise by 2.3 million bales to 44.8 million bales in MY26, indicating a broader uptick in demand across textile-producing economies.

China, which imported 15 million bales in MY24, is projected to import only 7 million bales in MY26. The country's shift away has left space for Bangladesh to rise to the top, which analysts say marks a notable structural shift in global cotton trade flows.

The USDA also anticipates stable cotton prices globally, aided by adequate supply, a weakening US dollar, and declining energy costs. These trends may ease cost pressures for Bangladeshi millers, who have grappled with high input costs over the past two years.

On March 17 this year, Foreign Affairs Adviser Md Touhid Hossain said Bangladesh intends to import more cotton from the US, creating mutual benefits for US suppliers and local businesses.

He added that such trade ties could offer Bangladesh protection amid former US President Donald Trump's tariff-centric policies.

Although the Trump administration has levied high tariffs on many countries, Bangladeshi goods have so far remained outside the purview of such punitive measures.

Hossain argued that sourcing more US cotton could further dissuade the administration from targeting Bangladesh, whose products face an average tariff of 15.62 percent in the US market.

He also stressed the need to boost domestic cotton production to meet at least 20 percent of the country's annual demand, amounting to about 9 million bales.

Currently, local production covers just 2 percent of that requirement.​

 

[Saif]

Apparel sector needs $6.6b investment to cut carbon emission by half: Report

Bangladesh's textile and apparel industry needs an approximate investment worth US$6.6 billion to help reduce the level of carbon emissions by half by 2030 through renewable energy and energy efficiency measures, according to a global report. Of the required amount, only $1.8 billion is currently

thefinancialexpress.com.bd

Apparel sector needs $6.6b investment to cut carbon emission by half: Report
Monira Munni

Published :
May 16, 2025 08:49
Updated :
May 16, 2025 08:49

Bangladesh's textile and apparel industry needs an approximate investment worth US$6.6 billion to help reduce the level of carbon emissions by half by 2030 through renewable energy and energy efficiency measures, according to a global report.

Of the required amount, only $1.8 billion is currently available or anticipated while there has been a gap of $4.8 billion, said the report titled 'Landscape and Opportunities to Finance the Decarbonization of Bangladesh's Apparel Manufacturing Sector'.

As of 2023, Bangladesh was among the top five countries having the highest level of potential in reduction of greenhouse gas emissions in the apparel and textile industries.

Apparel Impact Institute (Aii) in collaboration with Development Financial International, Inc (DFI) published the report on May 08 outlining how the country can close that gap and realize its decarbonization potential through strategic finance tools.

Aii is a global non-profit organisation, dedicated to identifying, funding, scaling, and measuring the apparel and footwear industry's proven environmental impact solutions and works with over 50 brands and retailers including Target, PVH, Lululemon and H&M Group that are leading the sector's global decarbonization efforts.

Bangladesh's textile and apparel industry contributes more than 80 per cent of the country's foreign export earnings, said the report.

The sector has significant potential to contribute to the goal of a 50 per cent reduction in greenhouse gas (GHG) emission by 2030, taking the industry's scale-- key production stages, including raw material processing, weaving, knitting, dyeing, finishing, manufacturing and distribution and continued reliance on fossil fuels, into consideration.

Despite its economic significance, local textile and apparel industry faces considerable environmental challenges and the high consumption of energy, water, and chemicals across the supply chain has contributed to significant environmental degradation and GHG emissions, according to the report.

In Bangladesh, natural gas burning remains the country's primary source of energy and RMG sector alone accounts for 8.2 per cent of Bangladesh's total electricity consumption, it said, adding that the textile and garment sector represents 27.8 per cent of Bangladesh's primary energy consumption.

Besides, there is growing pressure from brands and emerging global and local regulations for the industry to adopt cleaner and sustainable practices, it said.

Explaining the possible credit lines, it said as of September 2024, some 12 credit lines and revolving fund schemes have been identified, with close to $1.6 billion in available funding and $175 million in upcoming funding from International Financial Institutions (IFIs) and the national government.

"This leaves a financing gap of US$4.8 billion," it said, adding IFIs are also partnering with the government and private sector to improve energy policies, build local technical capabilities, and support decarbonisation initiatives," said the report.

It, however, found financial constraints, limited technical expertise, insufficient energy policies and inadequate infrastructure as major challenges that manufacturers face in transitioning to sustainability.

A lack of technical experts such as energy auditors in Bangladesh drives up costs and prolongs inspection processes, with energy audits averaging $10,000 - approximately double the cost in neighbouring India.

Building local expertise can help reduce costs and generate quality local jobs, the report suggested.

It further said the renewable energy market is still in its early stages, with limited renewable energy service companies (RESCO) activity and no energy service companies (ESCO) operations in Bangladesh recommending "Growth capital is needed to scale renewable energy and energy efficiency solutions."

The report also recommended, among others, enhanced support from brands, active involvement of manufacturers to address barriers like higher level of debt and perceived risks by encouraging brands to offer stronger incentives and support through various financing and de-risking instruments.

Talking to the FE, Shams Mahmud, managing director of Shasha Denims Ltd, said the industry itself has, so far, invested to help cut emissions, taking the EU regulations into consideration.

"It is difficult to make funds available mostly for small and medium enterprises as they (SMEs) don't have enough capacity and lengthy documentation procedures," he said. He went on: "The rate of interest also remains high."

Mr. Mahmud, however, said the green transition fund is not industry-friendly.

The main issue is to measure as how much decarbonization is done, he said, adding that there is a lack of skilled manpower in government agencies concerned.

About the measures, he said, his factory has undertaken to decarbonise, while they are installing new energy-efficient technology that can help reduce usages of water and chemical.

Such technology using tri-generation systems of power generation to reduce carbon footprint, enhancing the efficiency level to 85 per cent from 60 per cent in two years back.​

 

[Saif]

Apparel exports to EU surge by 33pc

Bangladesh’s apparel exports to the European Union showed a strong upward trend in the first quarter (January-March) of 2025, with total earnings increasing by 33 per cent compared to the same period in 2024...

www.newagebd.net

Apparel exports to EU surge by 33pc
Moinul Haque 17 May, 2025, 23:02

Bangladesh’s apparel exports to the European Union showed a strong upward trend in the first quarter (January-March) of 2025, with total earnings increasing by 33 per cent compared to the same period in 2024.

According to data from the Eurostat, the statistical office of the EU, From January to March 2025, EU apparel imports from Bangladesh totalled 5.68 billion euros, compared to 4.27 billion euros during the same period in 2024.

This increase of 1.41 billion euros in the quarter represents a notable 33 per cent growth in terms of value.

Knitwear exports drove much of this expansion, climbing nearly 36 per cent from around 2.39 billion euros to 3.25 billion euros. Woven apparel also performed strongly, with exports rising approximately 30 per cent from 1.87 billion euros to 2.43 billion euros.

Exporters attributed the recent surge in apparel exports to the EU to seasonal summer demand, early order placements by buyers and a recovering European market.

Although Bangladesh’s exports to the EU grew year-on-year in each of the three months, the rate of growth slowed gradually over the quarter.

Data showed that Bangladesh’s apparel exports to the EU in January 2025 posted the highest growth rate at 61 per cent, reaching 1.91 billion euros, followed by slower but healthy growth of 28 per cent in February with 1.66 billion euros and a further slowdown to 18 per cent growth in March with exports totaling 2.10 billion euros.

Bangladesh Knitwear Manufacturers and Exporters Association former president Fazlul Hoque said that the significant increase in the EU’s overall apparel imports in the first quarter of 2025 indicated a clear revival of the market.

‘The good news is that buyers are placing orders again — and the even better news is that a significant share of those orders is coming to Bangladesh. It shows that we are holding our ground, even as competition intensifies,’ he said.

The EU market saw strong growth in apparel imports in the first quarter of 2025, with total import value rising 20.6 per cent from approximately 19.44 billion euros in January-March of 2024 to 23.45 billion euros in the same period in 2025.

Knit apparel imports increased by 23.6 per cent, rising from 9.53 billion euros to 11.78 billion euros, while woven apparel imports grew 18 per cent, from 9.90 billion euros to 11.67 billion euros.

Overall, EU apparel imports rose by more than 4.9 billion euros year-on-year.

In volume terms, the EU’s apparel imports also recorded a significant increase.

Total import volume reached approximately 11.51 million kilograms in the first quarter of 2025, up from 9.57 million kilograms in the same period of 2024, a 20.3 per cent rise.

In quantity, Bangladesh’s total apparel exports to the EU rose from 2.90 million kilograms in the first quarter of 2024 to 3.61 million kilograms in the first quarter of 2025, an increase of 24.6 per cent.

Knitwear volumes grew by 29.5 per cent, from 1.76 million kilograms to 2.28 million kilograms while woven apparel exports increased by 17.1 per cent, reaching 1.33 million kilograms.

Among major EU suppliers, Bangladesh recorded one of the highest growth rates in value terms, surpassing key competitors such as China, Vietnam, Turkey, and India.

While it fell just short of Cambodia’s exceptionally high growth rate, it remained slightly ahead of Pakistan’s.

Despite the positive export trends, Fazlul Hoque cautioned that supply-side risks were mounting, particularly due to energy shortages.

He said that plans to divert gas from power generation could create significant energy supply challenges for the industry, potentially threatening Bangladesh’s ability to sustain or grow its market share.

Eurostat data showed that China retained its position as the EU’s largest apparel supplier by value. The country’s exports rose from 4.92 billion euros in the first quarter of 2024 to 6.35 billion euros in the same period of 2025, marking a 29 per cent increase. Knitwear shipments to the EU grew by 32.7 per cent, while woven apparel rose by 25.5 per cent.

Turkey saw a slight decline in total apparel exports, which fell by 0.9 per cent from 2.28 billion euros to 2.26 billion euros. While knit exports rose marginally by 1.5 per cent, woven apparel declined by 4.1 per cent, possibly reflecting changing competitiveness or supply chain dynamics.

India achieved solid growth, with EU imports rising from 1.07 billion euros to 1.37 billion euros, a 27.8 per cent increase. Knitwear grew by 34 per cent and woven by 22 per cent, indicating a broader improvement in India’s access to the EU market.

Vietnam’s apparel exports to the EU expanded by 22 per cent to 1.08 billion euros, supported by a 19 per cent rise in knitwear and a 24 per cent increase in woven apparel.

Pakistan recorded a 32.8 per cent rise in total exports, which reached 1.03 billion euros. Knitwear exports increased by 30 per cent, while woven apparel grew by 36 per cent.

Cambodia reported the fastest growth among all listed suppliers, with EU apparel imports rising by 37.8 per cent to 1.11 billion euros. Knitwear exports grew by 35 per cent, and woven garments surged by 41 per cent.​

 

[Saif]

Fast fashion, fat margins: How retailers cash in on low-cost RMG

Global fashion brands are reaping triple-digit profits on Bangladeshi garments, buying at $3 and selling for three to four times more. Yet, they continue to pressure factories to cut prices further.

www.thedailystar.net

Fast fashion, fat margins: How retailers cash in on low-cost RMG

Global fashion brands are reaping triple-digit profits on Bangladeshi garments, buying at $3 and selling for three to four times more. Yet, they continue to pressure factories to cut prices further.

A shirt manufactured in Bangladesh at a free-on-board (FoB) price of $5 often retails for as much as $28 in Europe or North America. Once shipping, warehousing, duties, and other operational costs are added, bringing the total to around $16, retailers may still earn a profit of about $12 per item.

Western retailers and brands often justify their pricing strategies by pointing to the high costs associated with global operations, including freight charges, currency hedging, warehousing, demurrage, markdowns, and advertising.

"There are overheads, of course, but let's not pretend they're not making money," said Fazle Shamim Ehsan, proprietor of Fatullah Apparels. "Especially in the mid to high-end market, many brands earn huge profits from goods made in Bangladesh."

Still, many Western buyers continue to pressure Bangladeshi factories to reduce the prices further.

A 2020 study by the European non-profit Fair Wear Foundation found that nearly 39 percent of garment manufacturers in the country had sold products at a loss.

The practice, exporters say, is mainly to preserve long-standing relationships with global retailers and to secure future contracts.

Meanwhile, data from the Centre for Policy Dialogue (CPD), a Dhaka-based think tank, suggests that Bangladesh consistently receives lower prices than its Asian competitors for similar products.

In 2020, Bangladeshi cotton T-shirts exported to the European Union (EU) fetched €1,091.5 per 100 kilogrammes, a 1 percent decline from the previous year, while Vietnam's equivalent product saw a 3 percent price increase, rising to €2,157.9.

The contrast was even sharper in pullovers.

Bangladesh's average price fell 7 percent to €1,329.5, whereas Vietnamese pullovers held steady at €2,157.8.

For garments made from man-made fibres, Bangladeshi exports declined 6 percent to €1,319.4, while Vietnam's fell by just 3 percent to €1,906.2.

The United States market reflected similar patterns, as shown in the CPD data.

The average price for a dozen Bangladeshi-made cotton T-shirts dropped from $22.43 in 2019 to $17.99 in 2020, a 20 percent fall, while Vietnamese suppliers experienced a slightly smaller decline, with prices falling from $38.2 to $31.9.

Bangladeshi sweaters and pullovers also saw a 2 percent price drop to $39.31 per dozen, whereas Vietnamese equivalents remained largely unchanged, with prices hovering around $47.

For trousers, the gap was wider still. A dozen cotton-fibre trousers for women and girls exported from Bangladesh earned $64.17 in 2020, down 12 percent from the year before. Vietnam, by comparison, received $84.6 for the same product after a smaller price adjustment of just 6 percent.

SYSTEMIC UNDERVALUATION

A 2022 report by the International Trade Centre (ITC) underscored the pattern of systemic undervaluation of Bangladeshi garments.

Men's woven cotton trousers exported from Bangladesh earned an FoB price of $7.01 per piece, which was 9.2 percent below the global average of $7.72. Vietnam received $10.76 for the same item, while Sri Lanka and India fetched $8 and $8.41.

Similarly, men's cotton jeans made in Bangladesh were sold at $7.81 per piece, 7.2 percent below the global average of $8.41, while Vietnamese jeans sold for $11.55.

Even in niche categories like man-made fibre bras, Bangladesh was paid considerably less, with exporters earning $3.19 per unit compared to Vietnam's $6.06.

Only two Bangladeshi products -- women's cotton trousers and men's cotton T-shirts -- were sold at slightly above the global average.

Women's cotton trousers earned $6.43 apiece, exceeding the world average of $5.22 by 23.3 percent, while men's T-shirts fetched $1.47, roughly 23.1 percent higher than the global benchmark.

Still, these figures were dwarfed by the earnings of countries like Turkey and Peru, which received up to four times more for similar items.

According to the ITC, which has a joint mandate with the World Trade Organization and the United Nations, these pricing gaps represent an entrenched imbalance in the global supply chain.

Industry insiders say Bangladesh's quality has improved, but its bargaining power remains weak.

RETAILERS CITE HIGH OPERATIONAL COSTS

Ehsan, owner of Fatullah Apparels, said jackets and outerwear produced in Bangladesh, often sold to retailers at FoB prices ranging from $20 to $25, regularly appear in stores for $100 to $110.

He added that some of the world's richest individuals have built their fortunes in fashion retail, with Bangladesh as a key production hub.

The profit chain often stretches beyond the retailers themselves.

Md Fazlul Hoque, managing director of Plummy Fashions Ltd, pointed out that a significant share of Bangladesh's garment exports is managed by intermediaries or third-party importers, who also take a cut before the goods reach retail shelves.

"Sometimes we sell a T-shirt at $3.50, and it ends up in a branded store for $39," Hoque said. "Of course, it doesn't stay at that price forever -- discounting comes in later, but the markup is still substantial."

He added that while pricing can vary across seasons and product categories, the general rule of thumb remains: most garments are sold at three to four times their FoB value.

However, a European retailer, on condition of anonymity, disputed the claims of excessive markups. "Those suggesting a substantial markup on Bangladeshi garment items are gravely mistaken," he said.

"In the garment supply chain, a European retailer must rent large warehouses to store goods, which is quite costly," he said, adding that transportation expenses also factor in.

"Renting retail space is another major expense, and ultimately, retailers and brands can sell, at best, 70 percent of the goods from a single consignment," he said. "Once the season ends, unsold items can no longer be offered to customers."

The retailer said that European companies pay higher wages than their Asian counterparts, which also affects profit margins. "Ultimately, European retailers earn less than 10 percent profit annually. The claims of high markups are exaggerated."

CALL FOR FAIR PRICING

Apparel industry advocates and multilateral organisations are increasingly urging retailers to adopt more equitable pricing models.

The ITC noted in its report that while apparel manufacturing has grown more complex, involving design, logistics, and branding, the actual cut-and-sew operations, which remain concentrated in countries like Bangladesh, continue to be the least rewarded.

Khondaker Golam Moazzem, research director at CPD, said that China and Vietnam are getting higher prices for their garments by utilising diverse fabrics and innovative product designs, despite sharing the same HS codes as Bangladesh.

In contrast, Bangladesh's garment exports are heavily reliant on just five or six products, accounting for 70 percent of its total exports. This concentration creates unhealthy competition, tempting local exporters to undercut prices, said Moazzem.

He also pointed out that the industry's heavy dependence on cotton and limited use of man-made fibres are also obstructing better prices.

"Bringing in more foreign investment could be a viable solution, as foreign investors usually have access to upmarket buyers and advanced technologies," said the CPD research director.​

 

[Saif]

RMG export to EU rises 29% in Jan-Mar

Bangladesh shipped $5.98 billion worth of apparels to the EU in the first three months of 2025

www.thedailystar.net

RMG export to EU rises 29% in Jan-Mar
Bangladesh shipped $5.98 billion worth of apparels to the EU in the first three months of 2025

Bangladesh's apparel exports to the European Union surged by 29 percent in the first three months of 2025.

The South Asian country shipped garments worth $5.98 billion to the EU in the January–March period of 2025, up from $4.63 billion in the same period of 2024.

Moreover, garment export volume to the destination also rose by a strong 24.64 percent, along with a 3.55 percent increase in unit price, according to data from Eurostat, the statistical office of the European Union.

The rise in export value, volume, and unit price indicates balanced growth in amount, quantity, and price in the EU market, the data said.

In the January–March period of 2025, the EU saw a significant surge in apparel imports, with growth of 16.84 percent, totalling $24.65 billion.

This increase was accompanied by a notable 20.25 percent spike in volume and a 2.84 percent decrease in average unit prices.

China, India, Pakistan, and Cambodia also experienced substantial growth in the same period.

China's apparel exports to the EU reached $6.67 billion in January–March 2025, up from $5.34 billion in the same period of the previous year.

However, Turkey faced a 4.14 percent decrease in apparel exports to the EU, totalling $2.37 billion in January–March 2025, while Vietnam recorded 18.09 percent growth, reaching $1.14 billion in exports.

India, Pakistan, and Cambodia secured $1.44 billion, $1.08 billion, and $1.16 billion respectively from the EU clothing market during January–March 2025.​