Bangladeshi garment exporters fear a drop in work order due to the rising global inflation caused by crises including the ongoing Russia-Ukraine war.
"We are already feeling the pressure of inflation. Some buyers have started to defer purchase orders, because in such a situation people will spend mainly for food, and buy clothes a little less," said Faruqe Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), at a press conference in a hotel in the capital on Saturday.
"We have informed the matter to our members so that they keep it in mind," he said at the press conference organised to unveil the logo of the "Made in Bangladesh Summit 2022," and to highlight the details of the 37th World Fashion Convention scheduled to be held in Dhaka in November.
He said the Russia-Ukraine war has led to hikes in prices of food, fuel oil, as well as to fears of a recession in some parts of the world, including Europe.
"Inflation is rising sharply around the world, which could affect the demand for clothes and people's purchasing power in the international market. This is a cause for concern for us," said Faruqe.
Inflation has recently become severe in the major export destinations of Bangladesh including Europe and America. Inflation in some of these countries is the highest in decades. For example, the United States now has the highest inflation rate in four decades.
A number of entrepreneurs in the garment sector have also reported a slowdown in the purchase of garments due to inflation and the ongoing Russia-Ukraine war.
Fazlee Shamim Ehsan, managing director and CEO of Fatullah Apparels, told The Business Standard, "Two European buyers have put their orders on hold."
Despite a significant growth in garment exports in the last few months, the sector has had to face a number of challenges.
"Entrepreneurs are struggling to survive in the face of rising production costs, challenges in supply chain, crisis of raw material, hike in prices of fuel, gas, and electricity, and a sharp rise in shipping cost," said the BGMEA president.
As the prices of raw materials have gone up sharply, the cost of garment production in Bangladesh has gone up too. Recently, the price of clothes has increased a little, but the exporters are still struggling to get a fair price for their products.
At the opening ceremony of the Sustainable Apparel Forum held in the capital recently, Faruque Hassan said the cost of garment production has increased by 30% in the last five years.
However, at yesterday's press conference, the BGMEA president expressed his hope that Bangladesh's existing share in the global garment market would increase from 7% to 10% in the next three and a half years if export-oriented policies including trade facilitation, stable tax and tariff policies were adopted.
"We expect our share in the world market to exceed 7.5% in 2022 and 10% by 2025," he said.
Faruque Hassan also said it would be difficult for the garment sector to achieve the desired growth by following the model they followed in the last four decades.
He said the country needs to focus on man-made fibre clothing instead of cotton-based clothing and demanded government incentives on non-cotton clothing.
Made in Bangladesh Summit in Dhaka in November
"Made in Bangladesh Summit" organised by BGMEA, the biggest ever event in the country's garment sector, is going to be held in Dhaka in November this year.
At the same time, the International Apparel Federation will organise the 37th IAF World Fashion Convention for the first time in Bangladesh.
During this time, many other programmes held here will become a gathering place for buyers, brands, suppliers, fashion icons.
Responding to a question at the press conference, the BGMEA president said government guidance and cooperation of buyers is required to keep information in Bangla in the price tag of the garment.
"We hope that with the cooperation of all parties, it can be started from January next year," he said.
At the programme, General Secretary of IAS Matthijs Crietee praised the progress of the garment sector in Bangladesh in the last few years.
"Perhaps more than ever before garment manufacturers play a pivotal role in the industry transformation we all need," he said.
"So, on the international stage presented by the 37th IAF World Fashion Convention, the Bangladeshi apparel industry will show itself as a source of solutions to the industry's current major challenges."