In the apparel export scenario, China, Vietnam, Pakistan, Sri Lanka, and Cambodia’s exports have increased manifold, while Turkey, India and Bangladesh face slowdown in export of garments and textile.
The decline in export has been blamed at the depreciation of currencies across the world in a spillover effect, starting probably with the economic crisis in Turkey and Argentina. It could be understood from the impact on how currencies behaved since the beginning of 2018 till date on textile exports and imports of the various countries.
Bangladesh’s textile and clothing imports fell 1.22 percent during April-June compared with the previous January-March quarter. The country has seen its exports slow down amid its own steady currency rate, and growing price competition due to weakening currencies elsewhere.
Bangladesh’s textile and apparel exports during April-June were down 0.32 per cent compared to exports during January-March. RMG exports, the largest product category in the segment, declined 0.31 per cent in the second quarter of 2018.
Exports of home textiles too fell 6.6 percent during the period. Exports of jute and jute products saw an improvement of over 2 percent. Competition from other suppliers, and a slowdown in European and US retail markets are also reasons for the country’s export slowdown.
India’s textile and apparel exports in July were 5.82 per cent lower than in January. Exports of woven apparel especially saw a steep drop of 19.43 per cent from January to July. Experts believe the flight of foreign funds is the main reason for the rupee depreciation.
Free fall of Turkish Lira has led to a clear slowdown in exports from the textile and apparel manufacturing hub. The country is going through an economic crisis. Turkey has recorded a devaluation of its Lira by as much as 60 percent.
With weak fundamentals, Turkey’s exports and imports have had a spiralling effect on countries supplying to Turkey. For instance, India’s polyester yarn exports to Turkey, its largest market for the commodity, have almost come to a standstill.
Meanwhile Myanmar and Cambodia are likely to face the music from European Union sanctions and removal of trade preferences, in a toughening of EU policy based on the human rights situation in those countries. This will be a welcome news for South Asian apparel exporters.
China’s currency since January 2018 has depreciated by over 6.36 per cent. The value of the Renminbi (RMB) against the Dollar weakened after the US-China trade war had a dampening effect on China’s exports, but has resulted in increased trade between China, Central Asia and Europe.
Vietnam is an important player in the apparel sector. Textile and apparel exports during the first eight months of 2018 have been mostly positive. The Vietnam Dong has remained quite stable, with a devaluation of around 2.45 percent from January to October.
Pakistan’s textile and apparel exports have increased 15.85 percent in August, compared to January this year. Exports of most of the country’s important textile product categories have shown robust growth, except readymade garments which fell 3.84 per cent.
Sri Lanka is known for its exports of high value apparel and lingerie, and has positioned itself as a sustainable producer of apparel, thus making a niche in the world market, and removing itself from commodity price competition to some extent.