Bangladesh posted year-on-year merchandise export drops in five single months during the July-May period of FY24, with a 16.06 per cent dip in May, which has significantly impacted the country’s 11-month total export earnings.
Export Promotion Bureau (EPB) data further shows that Bangladesh earned $4.07 billion in May, compared to $4.85 billion year-on-year. The amount was 23.75 per cent less than the commerce ministry's $5.34 billion export target for May this FY.
In the first 11 months of FY24, the country earned $51.54 billion through goods exports, which is 2.01 per cent higher compared to the same period of FY23.
The earnings fell at a time when the country is already facing severe forex shortages, and borrowing USD from the International Monetary Fund (IMF) and other international lenders to tackle the crisis.
It should be noted that the importers are failing to open letters of credit (LCs) on time, even though the central bank continues to sell USD to commercial banks.
According to EPB data, Bangladesh bagged $55.56 billion in export earnings back in FY23, posting a narrow 6.67 per cent year-on-year growth.
After a depressive October-December quarter in FY24 in terms of export growth, the RMG sector bounced back to positive growth, which had continued till the January-March quarter. But the sector again witnessed negative export earnings growth in April this FY.
The apparel sector, which holds the lion’s share of the export basket, failed to retain growth in May by 17.19 per cent year-on-year, and earned $3.35 billion.
Due to the negative export performance, the sector’s earnings went up by just 2.86 per cent year-on-year to $47.47 billion in the July-May period of FY24.
EPB data shows that almost all major sectors, except RMG, posted year-on-year negative earnings in the first 11 months of this FY.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Vice President (Finance) Md Nasir Uddin told The Business Post, “Current business environment in Bangladesh is poor compared to recent years, and that is why our production costs went up, while buyers are pressuring to reduce prices.
“That is why we are receiving fewer orders, which severely impacted the last two months' export earnings.”
Nasir then explained, “The country is facing gas and energy shortages, but the cost of all utilities went up several times. Buyers are asking for rapid delivery, but customs harassment is creating barriers.
“We have to pay bribes to every table, though we cannot get services on time. If the government does not take initiatives to remove the barriers, and fail to ensure uninterrupted gas and electricity supply, we see no hope in the coming months.”
BGMEA Director Mohiuddin Rubel said, “Exports are not up to the mark as the two major markets – USA and EU – have reduced apparel imports from the global market, which is the key reason for declining exports in a single month, coupled with declining unit prices.
“The eroding competitiveness of the industry can also be linked to such performance caused by increased cost of manufacturing.”
Negative growth persists in non-RMG sectors
Except for a narrow positive growth of the RMG sector, the country’s major export earners experienced negative growths in the July-May period of FY24.
Among other notable sectors, leather and leather goods experienced a negative growth of 14.17 per cent to $961.49 million, which was $1.12 billion in the first eleven months of FY24.
A once-promising sector, home textile, marked persisting negative growth of 24.29 per cent to $776.06 million, down from $1.02 billion in the mentioned period of last fiscal, stated the EPB data.
In the July-May period of FY24, export earnings from agricultural products, however, saw a positive growth of 8.2 per cent to $846.33 million, higher from $782.19 million in the same period last FY.
Export receipts from jute and jute goods further experienced negative growth of 7.53 per cent to $784.69 million, down from $848.6 million in the July-May period of FY23, according to the EPB data.
Another potential export sector, engineering products, again fetched a negative growth of 7.52 per cent to $479.96 million, down from $518.97 million in the same period of last FY.
