The yarn consumption by Bangladesh’s apparel industry experienced a significant decline during the latter half of fiscal year 2022-23, despite the country reporting increased earnings from its readymade garment (RMG) exports.
According to data from the Bangladesh Textile Mills Association (BTMA), local apparel factories procured 809,351 tonnes of yarn from January to June in the previous fiscal year. This marked a substantial year-on-year decrease of 31.55 per cent, equivalent to 373,080 tonnes.
Textile millers and apparel manufacturers attribute this decline in yarn demand to the global economic crisis, which is an aftermath of the ongoing Russia-Ukraine war even as this crisis has resulted in fewer orders compared to the industry’s production capacity.
To explain how Bangladesh managed to increase its earnings despite reduced orders, sources at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) reportedly pointed out that many factories have shifted towards producing high-value clothing items, thereby contributing to higher earnings.
Additionally, the RMG industry has recently increased its fabric imports, which, in turn, has led to a decrease in yarn consumption. Despite the boost in export earnings, overseas order volumes have been steadily declining.
The BGMEA Utilization Declaration (UD) permissions, which reflect the trend in export orders, have seen a sharp year-on-year decline of 1.56 per cent in the first half of 2023.
BTMA President Mohammad Ali Khokon expressed concerns about the situation, noting that many yarn and fabric manufacturers have had to reduce their daily production due to the shortage of orders even as he highlighted that rising gas prices have increased operational costs, compounding the industry’s challenges.
