Home textile suffers 32pc drop in exports

A combination of factors, including the ongoing Russia-Ukraine war-led sluggish demand, excess post-Covid inventory and a local gas-price hike, has significantly impacted the home textile sector in the country, industry insiders said.

The sector, which raked in $1.63 billion in the fiscal year 2021-22, experienced a staggering 32-percent decline in exports in the just-concluded fiscal year of 2022-23, according to official data.

The country’s earnings from home textile exports stood at $1.09 billion in the last fiscal year, showed Export Promotion Bureau data.

Pessimism looms among many home textile exporters who foresee no signs of improvement until next January.

This decline in exports follows two consecutive fiscal years of over 40 per cent growth, with fiscal year 2021 being heavily impacted by the Covid-19 pandemic.

Exporters attribute the export nosedive to a substantial inventory of buyers resulting from extensive sourcing during and after the Covid-19 period.

In addition, the Russia-Ukraine war has contributed to the slowdown of demand in major markets, including the European Union. The suspension of business operations in Russia by global fashion giants such as H&M and IKEA has further compounded the challenges faced by the sector.

Home textile is the country’s third-largest foreign currency earner after ready-made garments (knit and woven) and leather goods. It bagged $1.13 billion in fiscal year 2021 (FY21).

Export earnings from the sector showed a declining trend, dropping 10.90 per cent to $758.91 million in fiscal year 2020, down from $851.72 million in FY19, according to data from the Export Promotion Bureau (EPB).

While talking to the FE, Md Rashed Mosharrof, executive director of Sales, Marketing and Operations at Zaber and Zubair (Home), said people stayed at home longer during the pandemic, leading to a surge in demand for home textiles, particularly bed items.

Then buyers placed huge orders. However, as economic activity resumed and people started venturing outside, demand declined, resulting in an excess stock for buyers, he explained.

Mosharrof said that the ongoing war-led uncertainties have contributed to higher oil and food prices, prompting consumers to prioritise essential items like food.

Besides, the recent 150 per cent increase in gas prices has negatively affected the sector, leading to a production cost rise of up to 7 per cent, Mr Mosharrof added.

“We now lagging behind in competition especially with India that can now offer a lower rate,” he said.

Z&Z Fabrics Ltd, a subsidiary of Noman Group, alone exports an estimated $200 million worth of home textile products annually. It is one of the largest home textile producers in South Asia, with a daily production capacity of 0.3 million metres of fabric and employing nearly 8,500 workers.

Industry insiders said that some factories, originally set up for export business, have shifted their production focus to the local market due to insufficient work orders.

Shahadat Hossain Sohel, chairman of the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA), said that global home textile buyers have slowed down their orders for several reasons, including high inflation and interest rates in major markets.

“We have sufficient work orders until November last but now the situation is getting worse mostly due to gas price hike,” he said.

He, however, mentioned that most of the sourcing comes from federal purchases or government authorities in export destinations.

The BTTLMEA leader said some 40 home-textile factories are currently in operation.

According to the Bangladesh Textile Mills Association (BTMA), over a dozen home textile mills are registered with the association, with an annual production capacity of around 550 million metres.

The main exports in the home textile sector include bed sheets, bedcovers, pillow covers, cushion covers, curtains, rugs, quilts, kitchen aprons, gloves, napkins and tablecloths, mainly to countries in the European Union.

The products are also exported to the USA and Canada, according to the association.

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