RMG exports to EU fall $640m in FY26 despite May rebound 

Bangladesh's ready-made garment exports to the European Union declined during the first 11 months of fiscal year 2025-26 despite a strong recovery in May, highlighting continued weakness in demand for the destination. 

According to Export Promotion Bureau data, apparel exports to the European Union totalled $17.36 billion during the July-May period of FY26, a fall of $640 million compared to the previous fiscal year.

The decline comes after a robust FY2024-25 when exports to the bloc reached $19.71 billion, marking a 9.1% year-on-year increase. Industry stakeholders, however, say that growth was largely driven by higher prices rather than increased order volumes.

May recovery fails to offset broader slowdown

The exports rose to $1.82 billion in May from $1.52 billion in April, registering a 19.6% month-on-month increase and marking the second-highest monthly earnings of the fiscal year after January's $1.88 billion.

Despite the rebound, export performance remained well below expectations for much of the year. Shipments dropped sharply from $1.98 billion in July to $1.34 billion in September and later fell again to $1.35 billion and $1.33 billion in February and March, respectively.

Export Promotion Bureau Director Alamgir Hossain said the decline was more pronounced during the early months of the fiscal year, but recent data indicate a gradual recovery.

"The EU market has started showing signs of improvement in recent months. We expect this positive momentum to continue through the remainder of the fiscal year if demand conditions remain stable," he told TBS.

Germany remains top market, but orders stay below peak

Germany retained its position as the largest apparel market within the EU.

Exports to Germany increased to $409.3 million in May from $316.2 million in April. However, shipments remained below July's peak of $471.8 million, indicating that demand has yet to return to earlier levels.

Germany accounted for nearly 22.5% of the country's EU garment exports in May.

Spain remained the second-largest destination, importing $300.1 million worth of garments during the month, slightly higher than April's $285.5 million. 

Mixed performance across EU markets

Among other major destinations, exports to France rose to $190.1 million in May from $173.2 million in April, while Italy recovered to $139.9 million following several months of subdued performance.

Exports to the Netherlands reached $210.7 million, while shipments to Poland surged to $197.7 million.

In the Nordic region, Sweden recorded its highest monthly import volume of the fiscal year at $94.1 million. Denmark also reported stronger sourcing activity, with imports increasing to $82 million.

Belgium remained broadly stable at $51.9 million, while smaller markets such as Austria and the Czech Republic posted moderate growth.

Industry sees prolonged downturn

Rakibul Alam Chowdhury, former vice president of Bangladesh Garment Manufacturers and Exporters Association, said the sector has remained under pressure for most of the past year, with only brief periods of recovery.

"We have been experiencing negative growth for most of the last 10 months. April showed some improvement, partly due to delayed orders linked to election-related disruptions in key markets, but the overall trend remains negative," he said. 

Global conflicts, persistent inflation and higher retail prices have weakened consumer purchasing power in major markets, reducing sales and ultimately shrinking apparel orders, Rakibul said. 

"When major competitors receive policy support and incentives to cushion external shocks, our exporters face increasing pressure without comparable assistance. This has affected competitiveness and order flow," he said.

Rising costs erode competitiveness

Taimur Rahman, director of Mostafa Garments Industry, said the shifting global sourcing landscape has intensified competition in the European market.

"When the US market became more uncertain due to tariff issues, many suppliers turned their focus to Europe. That increased competition significantly and put pressure on prices," he said.

Highlighting structural bottlenecks in customs and bonded warehouse procedures, he said buyers are increasingly demanding customised products and accessories that often require the import of new items not covered under existing bonded warehouse classifications.

Heavy dependence on EU market continues

In May, total exports to the European Union stood at $1.97 billion, of which garments accounted for about 92%. 

The dominance of apparel exports highlights the sector's heavy reliance on European demand despite ongoing efforts to diversify products and markets.

Although May's recovery provided some relief to exporters, industry insiders say it is too early to conclude that a sustained turnaround is underway.