With recent surges in exports, China looks set to replace Bangladesh as number one supplier of woven shirts to the American market, shows a report of the US trade department. Exporters and trade analysts viewed the news as a serious concern for Bangladesh’s apparel industry, which earned worldwide fame for ‘Made in Bangladesh’ shirts and shares a significant portion of the country’s export revenues.

They, however, said Bangladeshi suppliers need to concentrate more on enhanced productivity and higher value products to maintain their export volume instead of being scared about surging Chinese penetration, which jolts the global trade as a whole. In 2006, US retailers imported about 33 million pieces of foreign-made shirts worth over $2.4 billion and nearly one of every four shirts was made in Bangladesh, while Chinese supplied less than one of ten.

Things started to change dramatically in 2007 as the latest analysis by the US commerce department on apparel imports shows that by March of the current year shipments of Chinese shirts surged by more than 166 per cent to 1.9 million pieces from a year-ago period. During January-March of the current year, Bangladesh’s shipments slowed down by 14 per cent compared to the exports of last year’s corresponding period.

If the present trend continues, China is likely to overtake Bangladesh as the number one source of men’s shirts to US market by the end of April. Bangladesh has been the traditional source of the cheapest shirts for US importers, earning $361 million or more than 12 per cent of total apparel export revenues from the world’s largest economy in 2006, while China earned $214 million.

In 2005, the first year after the global textile quota phased out, China made a strong foothold in US shirt market with three-fold increase in its exports to nearly 3.4 million pieces from the year before. In that year Bangladesh sustained 26 per cent growth with 6.6 million pieces and saw its volume grow to about 7.7 million pieces in 2006, while Chinese exports dropped to 2.94 million pieces.

Bangladeshi exporters in 2006 shipped per unit of shirt for less than five dollars, while Chinese earned nearly eight dollars for the same. Chinese shirt makers grabbed almost entire market shares in US market that had been vacated, in recent times, by European, Canadian and other western suppliers in the face of stiff price competition from Asian exporters.

‘A section of US importers, who used to source from Bangladesh, have now become cautious.’The trade analyst, however, pointed out that market demand for low-cost shirts, where Bangladeshi suppliers now concentrate on, had also been going through a change in recent times. ‘US market is diverting to higher value added and fashionable shirts, while Chinese suppliers are benefited from strong local supply bases for fabrics and raw materials making their shipments faster compared to many others.’

By enhancing productivity and value additions, Bangladeshi shirt makers should struggle to keep up existing growth rate and to stay above many other suppliers, if not those from China.