Bangladesh’s export sector witnessed 9.51 per cent year-on-year growth in the first quarter of FY2023-24 despite the ongoing global economic crisis and high inflation in the major export destinations.
However, almost all major sectors, except the country’s leading export item readymade garments, performed negatively during the period.
According to the Export Promotion Bureau (EPB) provisional data, the country earned $13.69 billion through exports in the July-September period of FY24. The figure was nearly $12.5 billion in the same period of FY2022-23.
In Q1 of FY24, the RMG sector earned $11.62 billion, which is 13.07 per cent higher than the amount earned in the same period in FY23. The sector’s contribution to the total export earnings is 84.89 per cent.
Meanwhile, in September, the export sector posted a 10.37 per cent year-on-year growth and earned $4.31 billion. However, the figure is 7.05 per cent lower than the commerce ministry’s target for the month.
Industry insiders said the sector failed to compete in the global market as expected due to the global economic crisis and high inflation in Bangladesh. But the RMG sector is doing well as the country is becoming an alternative sourcing hub for apparel sector buyers and exporters are diversifying their products and looking to new markets to boost export.
EPB data showed that in Q1 of FY24, the frozen and fish sector performed 25.05 per cent lower and earned $99 million. During the period, earnings from agriculture products also declined by 5.2 per cent to $257 million year-on-year.
The leather and leather goods sector, another promising export basket for Bangladesh, also failed to retain its export growth in the first quarter of this fiscal year. The sector earned $267 million through exports, which is 18.44 per cent lower than the amount earned in Q1 of FY23.
No good news for jute
Earnings from the jute and jute goods sector, which has been shrinking since the middle of FY2021-22, continued the declining trend in Q1 and earned $222 million, which is 9.67 per cent lower compared to the earnings of the same period of FY23.
This sector’s consecutive negative export performance also hit the domestic raw jute market this season, leading the price to drop to Tk 1,700-2,600 per maund (around 41 kg) and causing farmers to incur heavy losses despite having a good harvest thanks to favourable weather.
The golden fibre prices were Tk 2,800–3,600 per maund last season.
Former Bangladesh Jute Mills Association chairman Mohammed Mahbubur Rahman Patwari said, “Despite the crisis, the government is collecting 2 per cent advance income tax at the raw jute trading level and 1 per cent source tax during exports.
“The move is also creating barriers for Bangladesh to compete in the global market. Moreover, Bangladesh’s top export destinations for jute, especially Turkey, Iran and Sudan, are facing financial crises.”
RMG still on top
Despite the negative earnings, the RMG sector achieved tremendous export growth in the first quarter of FY24. While the sector earned $10.27 billion in Q1 of FY23, it increased to $11.62 billion in July-September of FY24.
However, the earnings were 3.58 per cent lower than the commerce ministry’s target for Q1 of this fiscal year.
In Q1 of FY24, knitwear sector earnings also jumped by 19.7 per cent to $6.76 billion and woven sector earnings rose by 4.97 per cent to $4.85 billion.
However, Bangladesh Knitwear Manufacturers and Exporters Association Vice President Fazlee Shamim Ehsan said, “The real scenario is that we have been facing order crisis since the middle of last year. Even, most of the factories, including mine, are running with low order than capacity.
“I don’t know how this sector saw the incredible export growth.”
Meanwhile, in Q1 of FY24, the home textile sector earned $189 million, which is 46.39 per cent lower than the amount earned in the same period of the last fiscal year.
Due to the ongoing global economic crisis, the sector has also been dwindling since the beginning of the last fiscal year. Sector insiders predicted that the market is likely to turn around in the third quarter of FY24.
Momtex Expo Head of Business Management Shahjada Rubel said, “Our export destinations are in trouble due to the global economic crisis. As the inflation rates of these countries have started to reduce, demand for our goods will increase in the market. But it will take some time.”
