Home ›› 10 Feb 2022 ›› Front
Bangladesh dethroned Vietnam last year to regain its position of second-largest apparel exporter as its local factories operated in full swing to meet increasing work orders during the pandemic.
Bangladesh earned $35.81 billion in 2021, Export Promotion Bureau data show, compared to Vietnam’s $32.75 billion in the same period, according to its General Statistics Office.
In 2020, Bangladesh lost its position to Vietnam, when it earned $27.47 billion against the latter’s $29.8 billion. Last year, Vietnam’s exports rose by 9.89 per cent but Bangladesh recorded a 30.36 per cent rise compared to the year before.
“In 2020, Bangladeshi manufacturers had to shut factories as Covid-19 infections soared. In contrast, Vietnam did not close factories as the infection rate was low,” SM Khaled, Managing Director of Snowtex Group, told The Business Post.
The temporary closure hampered production and negatively affected export earnings. He said that Vietnam took advantage of the situation and took over the second position.
Last year, Bangladesh did well as manufacturers ran factories in full swing with enough work orders as the Covid-19 situation worsened in Vietnam. This translated into better export performance, said manufacturer.
“Knitwear products mainly drove growth. The sector did well due to the supply of raw materials from domestic source,” said Khaled.
Bangladesh can supply over 90% raw materials for the knitwear sector.
Knitwear exports rose by 37.72 per cent to $19.59 billion in 2021 from $14.22 billion the year before. Woven products fetched $16.21 billion, up by 22.46 per cent, which was $13.24 billion in the same period a year ago.
In the US market last year, Bangladesh’s apparel exports grew by 36.79 per cent to $7.14 billion while Vietnam’s increased by 14.33 per cent to $14.37 billion.
What about 2022?
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Vice-President Shahidullah Azim noted that it was difficult to predict future exports direction in 2022 amid the onging pandemic but said he was optimistic that the local apparel industry would reach a new height over the next five years.
“There is huge growth opportunity for Bangladesh … with the current work order flow and buyers’ confidence, it won’t be tough to retain the second position,” he told The Business Post.
Apparel makers recorded more than 20 per cent rise in export orders in 2021 year-on-year, indicated by the surging number of Utilisation Declaration permissions issued by BGMEA.
“To retain our position, we have to attract Chinese investment as well as buyers who are relocating their purchase destinations. Normally, Chinese investors prefer Vietnam and Myanmar as there is similarity in culture,” he explained.
How to retain position?
Bangladesh’s gap is too big with China but small with Vietnam, the third-largest exporter.
“Bangladesh needs to reduce gap with China and widen with Vietnam for retaining the second position and making it stronger,” Zahid Hussain, former lead economist of World Bank, Dhaka told The Business Post. Bangladesh has more opportunities to grow and the country should couple diversification with skill development and technology adoption in manufacturing, he said.
“Vietnam’s apparel export was performing better in the last couple of years and its growth was showing a steady trend. So, there was a chance to surpass Bangladesh in terms of export earnings. It happened in 2020 and it could happen again,” Khondaker Golam Moazzem, research director at Centre for Policy Dialogue, told The Business Post.
The up and down in position is a temporary one, which should not be taken lightly. They did well with structural development and products diversification, said the economist.
“Bangladesh should think about the post LDC period when there will be tariff on exports but Vietnam will enjoy zero duty benefits,” said Moazzem.
