In the first half of 2022, Bangladesh saw a rise in the import of basic raw materials used to manufacture garment items. This was on the back of an increase in demand in the export markets, which even contributed to the dollar crisis in the nation.
The combined value of yarn, cotton, knitted, and woven fabrics in the period of January-June in 2022 was almost equivalent to that of the entire period of 2021, due to the surge in imports of these fabrics.
Global retailers and brands received an uninterrupted supply from Bangladesh even during the height of the pandemic, which brought the global supply chain to a halt. Hence, the surge, as orders poured from these brands and retailers. Moreover, the brighter outlook of the garment trade due to the recovery post the severe impact of the pandemic resulted in garment exporters and textile millers buying additional raw materials. However, this view has been impacted due to the Russia-Ukraine war that started in February of this year.
Data from the Bangladesh Textile Mills Association (BTMA) showed that textile millers bought yarn worth $2.66 billion in January-June, which accounted for 76% of the total import value of $3.5 billion last year. Knitters bought $1.29 billion worth of fabrics in the first half of 2022 from international sources. This was more than three-fifth of the $2 billion they spent throughout 2021. In the first half of 2022, another $2.21 billion worth of woven fabrics were imported, which represented almost 70% of the product procured last year. Millers imported raw cotton worth $2.26 billion in January-June this year.
It was $3.8 billion in 2021 in the same period.
For the export-oriented knitwear sector, at present, local spinners can supply almost 90% of the raw materials, while it can supply 40% to the woven segment.
Mohammad Hatem, Executive President, Bangladesh Knitwear Manufacturers, and Exporters Association, said that the import value of raw materials rose in January-June because of the spike in their prices in the global markets. The lower pressure of gas turned acute in January, February, and March in 2022. As a result, textile millers were unable to run their factories in full swing to produce yarn and fabrics. To meet the increased demand many garment manufacturers were compelled to import fabrics and even knitted fabrics from China, due to the energy situation.
Mohammad Ali Khokon, President, of BTMA, said that cotton imports witnessed a huge upswing in January-June because of the congestion that hit international ports in 2021 as global economies recovered from the pandemic. He added that due to the delay caused by container shortage globally, the cotton that was supposed to arrive at the Chattogram port in December in 2021, arrived in January or February.“As a result, cotton import in terms of both value and volume increased in the January-June half,” he said.
Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue said, “The increased price and higher volumes drove up raw materials imports,” said.
According to Hatem, though Bangladesh has got higher volumes of orders in recent months, it has not lived up to its expectation because of the war. Still, it will be able to reach its garment export target of almost $47 billion set for the current fiscal year.
He added, “The demand will not decline despite the war since Bangladesh produces basic and semi-high-end garment items. These products will always be high in demand.”
