Knitwear continues to dominate export

The knitwear segment has maintained its position as the country’s leading export earner in the garment industry and among all sectors in Bangladesh.

But the journey was not easy.

In its early years, it had to navigate through a quota system and securing raw materials was not easy as imports were the only option. He now faces growing challenges brought on by the coronavirus pandemic and Russia’s war in Ukraine.

The knitwear segment first overtook the woven sub-sector in fiscal year 2007-08 and held pole position until 2010-11.

Woven overtook the knit segment in 2011-12 and the dominance continued through 2019-20.

In 2020-21, knits overtook weaves and took back the glory. And it continued in the last fiscal year and brought in $23.21 billion, compared to $19.40 billion for the fabric.

Mainly local clothing suppliers attributed the change in fashion and style globally to the continued success of the knitwear sector

Even from July to September, the first quarter of the current fiscal year when overall export earnings showed a downward trend, the knitwear segment grew 9.40% year-on-year to 5.64 billions of dollars due to high demand amid the raging war and unprecedented growth. inflation in the euro area and the United States.

Mainly local clothing suppliers attributed the change in fashion and style globally to the continued success of the knitwear sector.

Fast fashion and casual dress have increased the use of knitwear over the past decade. Nowadays, even executives wear casual dresses in the office instead of formal outfits. Both knits and functional sportswear are used as dresses for formal events around the world.

Fashion connoisseurs prefer knitted items because they are comfortable and easy to wash. In addition, product diversification has taken place within the segment.

When Covid-19 brought the whole world to a screeching halt and severely damaged the global supply chain and businesses hit rock bottom, the country’s knitwear industry put on a surprisingly good show as Bangladesh has continued to supply clothing items to the world amid the raging flu. .

The segment also suffered damage.

The slowdown in knitwear shipping was first noticed in March 2020, when profits were a measly $1.05 billion. It fell again in April, to $180.2 million.

But it rebounded the following month as exporters clawed back $608.38 million as people were forced to spend more time indoors to avoid catching the deadly virus. Revenue soared to $1.16 billion in June.

“It was surprising that the demand for knitwear started to climb even during Covid-19 when the global supply chain came to a standstill. In fact, the export of knitwear continued to rise,” said Md Fazlul Hoque, Managing Director of Plummy Fashions, a Narayanganj-based Knitwear Exporter.

“Usage of knitwear has increased as consumers spend more time at home. During their long stay indoors, Western consumers primarily use T-shirts.”

Historically, the hosiery sector was cared for in Bangladesh due to the quota system which started in the late 1970s and was in place until 2004.

At first, knitwear manufacturers, especially those based in Narayanganj, shipped knitwear as the European Union granted the possibility of a loose and less cumbersome quota system. Thus, a strong market has been created for local knitwear.

In fact, Bangladesh made the most of the quota system, sowing the seeds for today’s gigantic knitting industry.

The EU and other developing and developed countries later relaxed rules of origin for knitwear, allowing least-developed countries such as Bangladesh to qualify for the Generalized System of Preferences in the bloc. trade even if imported cotton and yarn are used to ship exports. – oriented goods.

This has prompted knitwear producers to invest a lot of money in the sector and expand their manufacturing prowess.

Subsequently, entrepreneurs also pumped in money to produce yarn and other raw materials for the hosiery industry.

Currently, nearly 90% of raw materials are sourced locally, reducing reliance on China, a major feat for the industry as it has more than halved delivery time.

Even five years ago, the United States was not a major market for knitwear manufacturers.

“Today the United States has become a major export destination for us,” Hoque said.

Three years ago, the export of knitwear from its factory to the United States was almost nil while the world’s largest economy is now its biggest buyer.

Mohammad Hatem, executive chairman of the Bangladesh Knitwear Manufacturers and Exporters Association, said the demand for knitwear has not declined despite higher inflation in the euro zone and the United States.

Competitive pricing is a major factor in Bangladesh’s success in the knitwear industry.

“The export of knitwear has been steadily increasing and the momentum will also continue in the future,” Hatem said.

Faruque Hassan, chairman of the Bangladesh Garment Manufacturers and Exporters Association, expects knitwear’s dominance in exports to continue in the coming years as raw materials are readily available and demand of casual wear has boosted the demand for knitted products.

Currently, over 1,200 knitting factories are operating in Bangladesh, employing over 14.50 lakh.

About Ronda Reed

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