RMG net earnings rebound 10% in April-June amid looming energy, cost pressures

Infographic/TBS

Bangladesh's net readymade garment (RMG) export earnings rebounded strongly in the fourth quarter of FY26, rising 10.38% quarter-on-quarter, driven by higher knitwear exports.

Bangladesh Bank's latest Quarterly Review of Readymade Garments shows net RMG exports stood at $6.23 billion in April-June, compared with $5.64 billion in January-March. On a year-on-year basis, net earnings rose 20% from $5.17 billion in the same quarter of FY25.

Gross RMG export earnings also increased 9.79% quarter-on-quarter to $10.10 billion in the fourth quarter from $9.20 billion. The figure was 10.78% higher than a year earlier.

Knitwear exports rose 19.21% quarter-on-quarter to $5.50 billion from $4.61 billion, while woven garment exports increased only 0.31% to $4.60 billion from $4.58 billion. The strong performance in knitwear helped the sector recover from a relatively weak third quarter.

Bangladesh's merchandise exports also rebounded sharply in June, rising nearly 26% year-on-year to $4.20 billion. However, the late surge was insufficient to prevent a slight decline in overall export earnings in FY26.

Exporters said sharp June growth partly to a low base. Exports were weaker in June last year because of extended Eid-ul-Adha holidays, while most Eid holidays fell in May this year.

Despite the quarterly recovery, exporters remain concerned about energy and power shortages, which could weigh on apparel shipments in the coming months.

Pressures ahead

Mahmud Hasan Khan Babu, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said besides energy shortages, high interest rates and weaknesses in logistics, Bangladesh will face further challenges because of the free trade agreements between the European Union and India and Vietnam.

"However, if the domestic challenges can be addressed, the country's exports will perform better in the new fiscal year than in the previous one," he added.

Gas shortages have already severely disrupted textile production, industry insiders said, despite recent government assurances of improved supply.

Showkat Aziz Russell, president of the Bangladesh Textile Mills Association (BTMA), said more than 900 of its over 1,800 member mills are shut due to gas supply disruptions.

"Not only textile mills, but also gas-dependent steel, paper, particle board and ceramic industries are facing severe production disruptions due to the prolonged gas crisis," he said.

Higher value addition

The RMG sector imported $3.87 billion worth of raw materials in the fourth quarter, including cotton, synthetic and viscose fibres, yarn, fabrics and garment accessories.

These imports accounted for 38.32% of total RMG export earnings, resulting in a value addition of 61.68%, slightly higher than 61.35% in the previous quarter.

For the full fiscal year, however, the sector's performance remained subdued. Total RMG export earnings reached $38.97 billion in FY26, up only 0.96% from the previous fiscal year.

The sector contributed 7.82% to Bangladesh's nominal GDP during FY26, highlighting its continued importance to the economy and external trade.

The United States, Germany, the United Kingdom, Spain, France, the Netherlands, Italy, Canada and Belgium remained the major destinations for Bangladeshi apparel. They accounted for $7.24 billion, or 71.69% of total RMG export earnings in the fourth quarter.

The government and Bangladesh Bank have introduced several measures to support the sector amid rising production costs and global uncertainty. These include the Pre-shipment Credit Refinancing Scheme, Tk50 billion revolving Green Transformation Fund, Tk100 billion Export Facilitation Pre-finance Fund, and Export Development Fund.

The Bangladesh Bank said the near-term outlook for apparel exports remains moderately positive, supported by potential recovery in demand and improvements in compliance.