Global Economy: Bangladesh Gauze Production Is Expected To Decrease, Clothing Orders Decline In The Fourth Quarter

According to the latest report of the American Agricultural Counsellor, in recent years, Bangladesh's domestic economy has faced challenges such as declining foreign exchange reserves, high inflation and currency depreciation. In order to alleviate the crisis of foreign exchange reserves, the government raised the requirement for opening letters of credit, which affected the import of cotton and cotton yarn. Bangladesh's cotton import volume in 2023/24 is expected to be 7.5 million bales, lower than the 7.7 million bales expected by the US Department of Agriculture.

Considering the expected decrease of cotton import and consumption, the report will reduce the yarn output of Bangladesh in 2023/24 to 1.6 million tons, including 1.4 million tons of cotton yarn and 200000 tons of other yarns. At the same time, the output of grey cloth was adjusted to 4.5 billion square meters, 2% lower than the previous forecast.

In 2022/23, although the import of cotton, cotton yarn and cotton cloth decreased, Bangladesh's ready-made clothing export reached a historical high of 47.6 billion US dollars, with a year-on-year growth of 10%, due to the increase in orders and product prices. It is understood that Bangladesh's orders have been implemented as early as the previous year and the beginning of this year, and many factories have used the grey cloth and accessories in stock. At the same time, the production cost of ready to wear will increase in 2022/23, and the export order price will also rise accordingly. In addition, the factory's use of man-made fibers and the export of high value-added clothing also promoted the export of ready to wear.

From January to October 2023, Bangladesh's garment export volume will reach US $38.78 billion, up 6% year on year. About 44% of its exports will come from woven products, and the rest will be knitted products. The export volume of the two countries will be US $17 billion and US $22 billion respectively. It is reported that the orders of garment factories in Bangladesh will decline in the fourth quarter of 2023, which may lead to the decrease of garment exports in 2023/24.

From January to September 2023, Bangladesh's yarn import volume will reach 46 million US dollars, almost doubling year on year. China is the largest buyer. Over the same period, Bangladesh's imports of grey cloth reached US $1.87 billion, and China accounted for 67%.