The export of home textiles from Bangladesh is experiencing a notable resurgence after nearly a year of decline, attributed to the devaluation of the local currency, increased production capacity, and some improvement in gas supply. According to the Export Promotion Bureau (EPB), home textile exports rose by 7.85 per cent year-on-year during the July-December period of the current fiscal year, reaching US $ 410.81 million. This marks a significant turnaround from the negative growth experienced just a few months prior.
Home textiles, which include products such as carpets, rugs, curtains, bed linens, and towels, have now joined the ranks of the three new sectors that have surpassed US $ 1 billion in exports, alongside jute and leather goods. Notably, December alone saw a robust growth of 20.47 per cent in home textile exports, totaling US $ 83.98 million.
The industry faced significant challenges in 2023 and early 2024, primarily due to a dramatic increase in gas prices imposed by the Government—hiking rates by 150.41 per cent in February 2023. This surge in costs led many local exporters to halt new work orders, resulting in a shift of business to competitors in Pakistan. Exporters typically book work orders for home textiles in large quantities for one or two seasons, making the abrupt price hike particularly disruptive.
However, with the recent devaluation of the Bangladeshi Taka against the US dollar, an increase in spinning capacity, and slight improvements in gas supply, local exporters are regaining confidence. Md Shahidullah Chowdhury, executive director of Noman Group, which accounts for over 70 per cent of the country’s home textile exports, noted a recovery in his company’s exports, which rose to nearly US $ 27 million last month, up from US $ 22 million the previous month.
Chowdhury also highlighted the role of improved stability in Bangladesh and ongoing political unrest in Pakistan in aiding the recovery of home textile exports. Bangladesh’s home textile sector had previously achieved significant growth, crossing the US $ 1 billion mark in FY21 with a staggering 49.17 per cent year-on-year increase. This momentum continued into the following year, with exports climbing to US $ 1.62 billion. However, the gas crisis led to a sharp decline to US $ 1.09 billion, down nearly a third.
The shift of work orders to Pakistan—prompted by the doubling of gas prices in Bangladesh and the significant devaluation of the Pakistani rupee—has been a significant challenge for Bangladeshi exporters. Additionally, labor unrest and political instability have further complicated the landscape.
Despite these hurdles, the number of home textile mills has increased, particularly among smaller units, with more than 25 exporters now operating in this sector compared to just six or seven major mills previously, according to Monsoor Ahmed, former CEO of the Bangladesh Textile Mills Association (BTMA).
BTMA President Showkat Aziz Russell pointed to the Taka’s devaluation as a key factor in enhancing competitiveness, while noting that over 9 million new spindles have been installed in recent years to boost production. The target is to add 15 million spindles, with plans to complete over six million more by the end of this year.
While gas supply has improved, Russell emphasised the need for consistent pressure to further enhance investment and production in the primary textile sector.
Source: https://apparelresources.com/