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Bangladesh's apparel exports to reach $56 bn by 2026: CAL Research
07 Feb 23 2 min readBangladesh’s apparel industry is likely to face a contraction in the short term, while a strong rebound is expected next year, leading to exports hitting $56 billion by 2026, growing at a compounded annual rate of 5.3 per cent, predicts CAL Bangladesh, a Sri Lankan capital market financial services company. A slowdown in major apparel markets will weigh down on the country’s apparel exports in 2023, it noted.
Inflation will also push wage rates higher and gas shortage will increase production costs squeezing margins, the company noted in a report.
A fall in cotton prices stemming from waning global cotton consumption will, however, likely help ease price pressures, while the high local value addition and currency depreciation will benefit apparel exporters, said the report titled 'Rags First But Riches to Follow'.
Apparel exporters with higher exposure to the European markets will see a significant dip in revenue than those with higher exposure to the US markets as Europe proved weaker in averting the Ukraine war shocks.
Companies with high fixed-cost structures will experience a substantial reduction in their bottom line, and companies with high debt exposure and high inventory, given a sharp decline in the cotton price, will struggle in 2023, the report said.
Shifting of orders by global fashion retailers from China will drive export market share expansion for Bangladesh apparel, it said.
CAL expects Bangladesh's export market share in major non-traditional markets to increase to 10 per cent in 2026 from the existing 8 per cent.
Moving up the value chain through a gradual shift towards higher-margin products will also facilitate enhanced top-line growth.
Companies investing in the man-made fibre (MMF) segment are likely to witness faster growth. Also, companies expanding their portfolios with higher-margin product categories will perform better mid-term, the report added.
Fibre2Fashion News Desk (DS)
Bangladesh's apparel exports to reach $56 bn by 2026: CAL Research
Bangladesh's apparel industry is likely to face a short-term dip, while a strong rebound is likely next year, leading to exports hitting $56 billion by 2026, growing at a...
