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1. Background:
Ready Made Garment (RMG) industry has been occupied significant place in the volume of merchandise trade in the world. Among many industries, the global ready-made garments (RMG) and clothing is one of those sectors that were integrated to multilateral trading systems and this integration has been possible due to the removal of multi-fiber agreement on textile and clothing since 1 January 2005.In 2014, World trade in RMG comes up with a figure of US$ 885.74 billion and continuously growing. In the global RMG markets, the major importers are North America (particularly USA & Canada), European Union (EU28). In recent times, there has been emerged some RMG export markets such as South Africa, Brazil, Chile Russian federation, UAE, Qatar, Egypt due to the increased in population, GDP, per capita GDP and purchasing power of population of these countries. On the other hand, Asian developing countries such as China, Bangladesh, Vietnam, Cambodia and India are the major exporters of Global RMG and they contributed to about 57 percent share in global RMG export.
China with its 38.6 percent share in global RMG, has been remained cost competitive in RMG production in terms of textured yarn, knitted fabric and woven textured fabric in compared to others RMG exporter counties.
But because of increasing in labor wage as well as other policy changes in china, it is shifting to produce low cost RMG products to high end products to sustain its competitiveness and this has been already manifested in china’s RMG export scenario that is in 2014, china’s knit wear export was US$ 91.99 billion which was 0.09 percent lower than the previous year.
However, China’s such shifting would expected to open new windows for some RMG exporter Counters where labor costs are comparatively low including Bangladesh, Vietnam, Cambodia and India etc.
2. Current Scenario of Global RMG Industry
The global export of RMG stood at US$ 471.75 billion with a growth rate of 6.60 percent from only US$249.18 billion in 2004. There had also been 47 percent increased in Global RMG export of which the export of knitwear had been increased by around 52 percent and the woven had been around 42% in the last 10 years. From the year 2007, the export of knitwear share in global RMG export had exceeded that of woven export except to the year 2008 when oven export was 2.1 percent higher than knitwear export.
The growth rate of Global RMG have been maintaining on an average 7.44 percent per annum over the last 10 years despite the growth fell in two time periods one is 2009, which was -12.41 percent and the another was -0.71 percent in 2012. However, the highest RMG export growth was experienced by 17.22 percent in 2011.
The import of Global RMG reached to 413.99 billion in 2014 with around 6.60 percent of growth rate up from 259.86 billion in 2004. At the same time, There had also been around 37.2 percent increased in Global RMG import of which the import of knitwear increased by about 42 percent and the woven increased by 42 percent in the last ten years periods. But in the year 2008 and 2012, both the import of knitwear and woven experienced negative growth rate of -9.86 percent and -4.98 respectively. It is also notable that both woven and knit wear import showed an overall increasing trend in terms of share of total RMG but the rate of knitwear import was increasing more than woven wear. However, the growth rate of Global RMG import had been maintaining on an average 6.18 percent per year in the last 10 years.
Leading Players of Global Knitwear Export Market
The leading players of global knitwear is china with an export of US$ 91.99 billion in 2014 followed by Bangladesh, Hong Kong(China) Turkey, Germany, Vietnam, Italy, India, Cambodia, Belgium and Netherlands. From the table, it is also seen that China, being the largest exporters of global knitwear, registered 8 percent compound annual growth rate (CAGR) over the last 5 years whereas Cambodia achieved the highest CARG of 19 percent followed by Bangladesh and Vietnam achieved second highest CAGR of 17 percent over the same time period. In a similar fashion, India , Netherlands, Turkey, Belgium, Germany, achieved positive CARG of 13percent , 12 percent, 7 percent, 6 percent and 4 percent respectively except to Hong Kong, China who witnessed negative CAGR of -4 percent in the last 5 years. In 2014, total global export of knitwear was US$ 238255.95 million of which China had a share of 38.6percent of total global knitwear whilst Bangladesh, Cambodia, Vietnam, Germany, Italy and India share in knitwear export was 6.1 percent, 4.4 percent, 3.9 Percent, 3.9 percent, 3.7 percent 3.1 percent respectively.
Leading players of Global Knitwear’s Import Market
The leading players of Knitwear import including USA, Germany, Japan, UK, France in the the last 5 years and these countries knitwear import showing an overall increasing trend. The USA is the largest knitwear importer globally with US$ 45.11billions in 2014 as the Americans have highest average household income and employee income in the world and thereby their purchasing power capacity for buying knitwear. Germany comes 2nd, Japan comes 3rd, UK comes 4th and France comes 5th in terms of the size of import volume of knitwear .In a similar fashion, countries like Hong Kong, China, Italy, Spain, Netherlands, Canada and Belgium can be considered major importer countries of Knitwear and these countries also showing an overall increasing trend of import during the last 5 years Netherlands’ import of knitwear increased sharply with 7.2 percent CAGR over the last 5 years followed by Canada (5.4 percent) Spain (4.6 percent), Germany (4.4 percent) USA (4.2 percent) and Japan (3.6percent) whilst Italy’s import of knitwear fell with -1.6 percent CAGR and Hong Kong, China’s import remained more or less steady with 0.9 percent CAGR over the same period. In 2014 the United States share of total knitwear import was 21.8 percent followed by Germany with 9.2 percent), Japan with 7.1 percent, United Kingdom with 6.8 percent and France with 5.5 percent respectively.
Leading players of Woven wear’s Import market:
The total world export of woven in 2012 stood at 192.11 US$ billions which were -3.2 percent less than that of previous year 2012. After 2012, the global woven export increased by percent to US$209.44billion and by 11 percent to US$ 209444.99 million during 2013 -2014 period. In 2014, the major Global woven importer countries are including China with 35 percent share of globally woven import followed by Italy with 6.1 percent, Bangladesh with 6.0 percent and Vietnam with 4.5 percent, Germany with 4.4 percent share and India with 3.9 percent.
Leading Global Importers of Woven:
The total global import of woven in 2010 reached at US$ 171.34 billion which growth rate was 6.0 percent more than previous year 2010. The global woven import experienced the highest growth rate of 13.8% percent in 2013 but, After 2013, the global woven import was decreased by -5.5% percent to US$ 197.42billion and subsequently global woven import recovered from negative growth rate and posted 4.6 percent and 4.8 percent growth respectively. In 2014, leading Global importers of woven comprising United States with percent share of 18.3 percent followed by Germany with 9.2 percent, Japan with 7.1 percent , United kingdom with 6.5 percent and France with 5.7 percent respectively. Others countries mentioned in the pie graph such as Spain, Italy, Hong Kong China, and Republic of Korea also had a good share of woven import.