Sweater suppliers in Bangladesh are having a relatively lackluster season due to a longer than usual drought period in European countries and the higher cost of living fueled by the Russian-Ukrainian war.
Due to climate change, some parts of the continent, home to more than 60% of garments exported from Bangladesh, even experience up to 30 degrees Celsius in temperature even in September, which is unusual since summer ends after June in Europe.
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A sweater is a winter garment: if the winter is colder, the demand for a thick sweater increases, while when it is milder, a lighter sweater sees its sales increase.
But two-thirds of Europe was under some sort of drought warning, in what is probably the worst such event in 500 years, the BBC reported in late August, citing a report by the Global Drought Observatory. drought, which is part of European Commission research. wing.
Italy, Spain, Portugal, France, Germany, the Netherlands, Belgium, Luxembourg and the United Kingdom were in increasingly dangerous conditions.
Another factor is higher inflation.
Inflation in the Eurozone reached 9.1% in August, compared to 8.9% in July, which reduced the ability of ordinary people to buy.
As a result, clothing retailers and brands in Europe are either delaying placing new orders in Bangladesh or have placed fewer orders since the sales slowdown.
“Retailers and international brands are delaying delivery of products for which orders were placed between December and March, citing the accumulation of unsold stocks,” said Shahidul Islam, managing director of Rupa Group, a major exporter of sweaters.
For example, a major European sweater supply company, which purchases nearly $2 billion worth of sweaters from Bangladesh every year, has suspended securing finished products.
“Additionally, many European retailers and brands have closed their stores in Russia. This has also affected the supply of sweaters from Bangladesh,” Islam said.
He blamed the long summer for the slowdown in sweater sales. Rupa Group shipped over $16 million worth of jerseys last year.
Russia is an important sweater export destination for Bangladesh. And the war, which started in February this year, seriously affected the expedition.
Md Rezwan Selim, managing director of Softex Sweater, another sweater supplier, confirmed that it has received fewer orders from international buyers since November.
“It’s unusual for my plant,” he said.
Although the entrepreneur expresses his hope that the situation will improve a lot from January, no one knows how long the war in Ukraine will last.
Due to the war, the continent is facing a severe energy crisis, with Russia having largely suspended the supply of cheap natural gas and the situation could even lead to power outages, factory closures and a deep recession. . Russia supplied 40% of Europe’s natural gas.
The longer summer in Europe and the heat waves that affected most of the continent until the end of August did not have a direct impact on Dragon Sweater & Spinning’s sweater exports.
“However, some customers were late in taking delivery of the goods,” acknowledged Mostafa Quamrus Sobhan, president of the exporter.
But as temperatures drop across Europe, sweaters have started to take up space in retail stores.
The real impact will be clearer after the winter sales period. Indeed, unpredictable climate changes can even lead to extreme winters.
“The continuing shortage of gas across Europe may lead to rationing of public services, which means less use of heaters in offices and homes. This may force consumers to buy warmer clothes during the winter. winter period,” Sobhan said.
Although the risk of Europe slipping into recession has intensified, Bangladesh’s sweater exports to the mainland may not be badly affected as the country produces items for low-end markets, a number of experts said. exporters.
However, shipping to markets in Ukraine, Russia and Poland appears to have taken a hit due to the current geopolitical crisis.
And if the war continues any longer, the future of the winter 2023 sweater export could indeed be unpredictable, Sobhan said.
Poland’s largest clothing retailer, LPP, a major buyer of Bangladeshi sweaters, closed its Russian stores in March after Russia invaded Ukraine, according to Euronews. Sales in Russia accounted for 19.2% of group revenue for 2021-22.
The closure of outlets has affected the export of sweaters from Bangladesh, exporters said.
In the last fiscal year 2021-2022, Bangladesh shipped sweaters worth $5.64 billion, registering a growth of 39.25% year-on-year. It was $4.05 billion in 2020-21, according to data from the Export Promotion Bureau.