How can Australia be a market like the United States for Bangladesh in terms of clothing exports?

The Bangladesh Apparel Summit was organized on 18 July 2023 in Melbourne to showcase the strength and transformation of Bangladesh's RMG industry as a safe and sustainable apparel sourcing hub to the world.

This was the first summit organized abroad by Bangladesh Garments Manufacturers and Exporters Association (BGMEA) in association with HSBC.

The summit was supported by the Bangladesh High Commission in Australia where Snowtex Group, Team Group, Green Textile Limited, Epic Group of Concerns and Bangladesh Textile Mills Association (BTMA) were event partners.

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The event brought together a broad spectrum of stakeholders, including brands and retailers, and also people from NGOs including academia, Oxfam Australia, ActionAid, cotton and wool suppliers and Australian government officials.

The summit served as an opportunity for fruitful discussions, interaction and exchange of views and information. Australia, an emerging and high-potential non-traditional market, has become a $12 billion export destination for Bangladesh despite the ongoing global economic downturn.

In the first ten months of the 2022-23 fiscal year, Bangladesh earned $1.05 billion from the market, a year-on-year increase of 34.3 percent, accounting for 2.3 percent of total export earnings of $54.68 billion, according to Export Development. Bureau (EPB) Information.

Industry insiders and experts say duty-free market access in Australia, product diversification, extensive marketing in that country and Sino-Australia geopolitical tensions have helped Bangladesh achieve this milestone.

If the businesses continue on their current trajectory, their revenue could double or even triple in the near future, they claimed.

Amidst the ongoing economic crisis, this is good news for all and we welcome it.

This is because Australia will continue to have duty-free market access after the country graduates from LDC status in 2026. We have been able to gain the confidence of Australian importers because of the long-term policy announcement. That is why they are turning to Bangladesh for sourcing more garments.”

We are now making high quality items and the people of the country are also using them. China-Australia geopolitical tensions have motivated the country's importers to diversify their import destinations which has helped us achieve growth. I think the trend will continue for a long time with 4 percent cash incentives for exporters and we are performing well in non-traditional markets due to initiatives by BGMEA and exporters. We are using high-tech machinery and manufacturing high-value garments that help us achieve our goals. We have a lot of potential to increase exports of non-cotton products and that is why we are seeking 10 per cent cash incentive for exporting products which will help us earn more.”

What products are in demand in Australia?

Although Australia imports about 275 billion dollars a year, Bangladesh's export basket is limited. Bangladesh exports Australian-made garments (RMG), home textiles, leather and leather products, footwear, jute and jute products, pharmaceuticals, live and frozen foods, crustaceans and plastic products, etc.

EPB data showed that during the July-April period of FY23, out of total exports of $1.05 billion, $961 million came from the RMG sector and $46.59 million from home textiles. 

Besides, $8.5 million in export earnings came from trunks and suitcases, $5 million from non-leather footwear, $3.3 million from hats, $2.47 million from sugar confectionery, $1.64 million from basket work, $1.61 million from bread and pastry, jute cloth. From 1.25 dollars, 1 million dollars. From jams and jellies, $1.03 million from crustaceans. 

Although the RMG sector has performed well in Australia, Bangladesh has a huge opportunity to earn from exporting other products.

Bangladesh can earn by exporting agricultural processed products, processed food, diversified products of jute, fruits, vegetables, leather and leather products. But the problem is that adequate initiatives of road shows, trade fairs and business to business dialogues have not been taken to increase exports. Even three years ago there was no joint chamber. But India has been looking to increase exports to Australia for the past five-six years

“Australian consumers are using high quality items and they never settle for low quality products. If we can maintain product quality and take pragmatic steps, exports of non-RMG items will also increase

Due to lack of marketing, jute exporters could not increase exports despite huge demand in Australia. As Bangladesh's contacts with Australian businesses are limited, the government should organize several expos in Australia. India has already done that.

According to media reports, Australia imported apparel products worth $7.40 billion in 2021 and Bangladesh exported products worth $765.47 million to the country. Sparrow Group Managing Director Shovan Islam said, “We are performing well in new markets. Among new markets, Australia is second only to Japan.” Now we are manufacturing high value fabrics using latest technology. Besides, our production cost is lower than other countries. Because of this, Australian buyers are showing interest in increasing trade with Bangladesh.

According to EPB data, the RMG sector has generated the highest revenue in the first 10 months of the current financial year by exporting high-end and luxury garments. During this period, exports of knitwear items amounted to $643 million and oven items to $318 million. Among knitwear and woven items, $368 million in revenue came from exports of suits and blazers, $269 million from T-shirts, $125 million from jerseys and pullovers, and $47 million from shirts. In addition, bed and table linen generated $33 million and tarpaulins $10 million.

Manufacturers of sweaters and winter clothes, in particular, face a shortage of orders during the August-January period. Australian shoppers are important to us because they buy the same things in our vulnerable times as Australia moves away from dependence on China due to the geopolitical crisis. That is why there is an opportunity to increase our market share in Australia from 10-12 percent to 35 percent in a few years. Also, although New Zealand is a small market, they are using high value items. We can export products to the country via Australia. Many Australians are likely to invest in Bangladeshi RMG backward linkages as their imports from the country are increasing and the government should focus on this sector.

Authored By: Nandita Roy

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