BGMEA: Bangladesh overtakes Vietnam in RMG earnings from Jan-July'21

Bangladesh regained its position as the second largest apparel exporter by earning $1.94 billion more than Vietnam in the first seven months of this calendar year, said the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

According to the BGMEA officials, Bangladesh exported apparel products worth $18.80 billion during the period, against Vietnam's exports worth $16.86 billion.

However, both Bangladesh and Vietnam perceived a negative growth of 7.66% and 7.30% respectively during this seven-month period, compared to 2019.

Earlier, Vietnam overtook Bangladesh in the global apparel market and became the second-largest global ready-made garment (RMG) exporter, according to the World Trade Statistical Review 2021 released by World Trade Organization (WTO), on July 30 this year.

According to the data, Bangladesh’s share in the global apparel market dropped to 6.3% in 2020 from 6.8% with a market value of $28 billion in the same year, while Vietnam's share in global RMG exports stood at 6.4% in 2020, up from 6.2% a year earlier with a market value of $29 billion.

However, apparel exporters said that the data was based on 2020 when Vietnam's export growth remained unhurt during and Bangladesh's exports steeply nosedived due to the Covid-19 pandemic.

But from this year, Bangladesh's garment industry started to turn around. So, it is not uncommon for Bangladesh to regain the second position again by overtaking Vietnam, they also said.

Also Read - Vietnam overtakes Bangladesh, becomes 2nd largest RMG exporter

Talking to Dhaka Tribune, Mohiuddin Rubel, director of the BGMEA, said that as per the official data of Bangladesh government and the official data of Vietnam, Bangladesh clearly stays ahead of Vietnam during January-July period of 2021.

The official export of Vietnam during this period stood at $16.86 billion, while for Bangladesh it was $18.80 billion. So, Bangladesh earned $1.94 billion more than Vietnam by exporting apparel goods,” he added.

However, according to the General Statistics Office (GSO) of Vietnam, they earned $18.46 billion from textile and garments export during January-July period of 2021.

In this regard, Mohiuddin Rubel said that the Vietnamese government aggregates their textile export with garment while publishing data, so the data they publish is not exclusively apparel export.

“But the WTO calculates the textile and apparel sector separately, and that is logical. We can confidently say that Bangladesh will remain the second largest garment exporting country by the end of 2021,” he added.

Shahidullah Azim, vice-president of the BGMEA, told Dhaka Tribune that Bangladesh undoubtedly overtook Vietnam a few months ago.

"We expect Bangladesh to export about $4 billion more than Vietnam by the end of this year, as the factories have enough purchase orders. At the beginning of 2021, exports to EU countries were slightly lower but the exports have started to increase in this destination at a significant rate,” he added.

He also said that if Bangladesh can improve their position in the Ease of Doing Business and achieve the desired target in all the parameters associated with it, the country will earn $3-$4 billion more from apparel exporting than their setting target.

Also Read - OP-ED: What did Vietnam do that we could not?

Bangladesh is ranked 168th out of 190 in 2020. It is tough to unload the goods before 7 days from airports as there is no necessary equipment, and also a lack of skilled manpower, he added.

He also said that there are various complications at the port, and complications related to bonds, and infrastructures. These types of complications at various points are hindering exports severely. To increase exports, these must be fixed immediately.

“Moreover, utilities such as electricity and gas pose various unwanted problems. If all these problems are solved, if we can improve our Ease of Doing Business rank, our exports will increase even more than our target,” he also said.

However, exporters opined that Bangladesh should diversify its export basket within the RMG sector to sustain the pace of growth.

Bangladesh needs to improve in labour productivity, capital productivity and diversification. It also needs to increase skills, move from low end to high end, increase value addition, increase product basket, and reduce lead time.