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Bangladesh becoming a key sweater sourcing hub
REFAYET ULLAH MIRDHA
Bangladesh is turning into a major sourcing hub for sweaters for international clothing retailers and brands as work orders are shifting from China and global fashion trends are changing.
Chinese manufacturers are no longer interested in making sweaters because of the complexities in the manufacturing process, higher cost of production, and shortage of skilled workers, according to industry insiders.
As a result, exports of the item are rising from Bangladesh, the world’s second-largest garment supplier after China.
Earnings from sweater exports reached $4.05 billion in the fiscal year of 2020-21, up 12.62 per cent year-on-year, data from the Export Promotion Bureau showed.
In FY20, the receipts stood at $3.59 billion, a decrease of 15.47 per cent from the previous year’s $4.25 billion, as the severe fallout of the coronavirus pandemic took a toll.
“Trends show that the export earnings will cross $6 billion at the end of the current fiscal year,” said Mostofa Quamrus Sobhan, managing director of Dragon Sweater and Spinning, one of the leading sweater exporters.
He secured 20 per cent higher rates this year compared to last year after his buyers adjusted the price in line with increased cutting and manufacturing costs and raw materials prices in the local and international markets.
“The buyers are also paying a bit higher this year because of an abnormal rise in freight charges,” said Sobhan. He is receiving nearly 20 per cent more work orders this year compared to a year ago.
The demand for sweaters is rising worldwide because of changes in fashion trends.
Previously, people used to wear sweaters only during the winter season but now they put on lightweight sweaters all year round as a fashion item.
“So, sweaters have turned into an all-weather fashion item,” said Sobhan, who has been shipping the item for a long time.
The temperature has gone up in many cold countries because of climate change, driving down the demand for thick sweaters and pushing up the consumption of lightweight sweaters.
Bangladesh has a strong position in the manufacturing of lightweight sweaters.
Moreover, the use of modern technologies such as the Jacquard machine in sweater production has raised productivity. Four or five workers are needed to run a manual sweater machine but only a single labourer can operate four to five Jacquard machines that have a higher production capacity.
“This technological transformation has made exporters more competitive globally,” said Shahidul Islam, managing director of Rupa Group, which sells sweaters worth $30 million a year.
A number of new markets such as South Africa, Japan, and Russia have emerged as promising sweater export destinations from Bangladesh in recent years. The largest sweater markets for Bangladesh are Canada, Europe and the US.
Of the $600 million garments exported to Russia last year, the majority were sweaters. Russians use sweaters all year round and they offer better prices than other countries.
At the beginning of the Russia-Ukraine war, Islam faced difficulties in getting payments from Russian buyers. The uncertainties disappeared as the banks he dealt with have not been banned by the global financial messaging network SWIFT.
What is more, Russian buyers are seeking to use alternative channels to pay Bangladeshi exporters so that their shipments to the country are not affected.
Islam shipped the garment item worth $2.5 million to Russia last year and may resume sweater exports to the country from August.