Bangladesh’s hopes of expanding exports in emerging markets is now at an impasse, as the country failed to retain export growth in Russia, China and United Arab Emirates (UAE) in the recently concluded FY23.
Though Bangladesh’s export earnings to Saudi Arabia jumped in the last FY when compared year-on-year, it failed to reach stakeholder expectations, show latest data from the Export Promotion Bureau (EPB).
Most of the earnings from the emerging markets came from apparel, jute and jute goods, home textile, leather and leather goods and footwear exports. Non-RMG items mostly failed to perform well in these markets last FY, which severely impacted the gross earnings.
The apparel sector posted growth in the emerging market during last FY. However, earnings from the sector derived from the Russian market fell drastically during the period.
Industry insiders say due to the ongoing Russia-Ukraine war, exporters are facing a crisis of payment methods in the Russian market, as the country has been kicked out from the SWIFT code.
This is why the apparel makers have been receiving a lower volume of orders from the Russian market. Besides, the war has triggered high inflation in the global economy, which in turn has cut the people’s purchase capacity.
Such issues are severely impacting Bangladesh’s gross earnings from the emerging markets.
Speaking to The Business post, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Vice President Fazlee Shamim Ehsan said, “We do not know when the Russia-Ukraine war will stop.
“If the war becomes a prolonged affair, there will be little hope for improving export earnings from the Russian market. We are currently approaching other markets in a bid to increase apparel exports, as there is a huge opportunity.”
Echoing the same, Bangladesh Terry Towel & Linen Manufacturers and Exporters Association Chairman M Shahadat Hossain said, “We were doing well in the Russian and UAE market before the Russia-Ukraine war started.
“But our export earnings dropped due to the war and ongoing global economic crisis. We have received some quarries from the Russian buyers recently, and we are optimistic that the UAE market will also improve a little in the coming days.”
Hossain added, “We are expecting some growth in this fiscal year if any unwanted situation will not come further.”
Bangladesh Jute Goods Exporters Association Director Esrat Jahan Chowdhury said, “The emerging market was one of our key earning destinations. But due to the ongoing global economic crisis, orders from buyers have decreased significantly.”
“We are now navigating through troubled waters,” said Esrat, also the CEO of Tulika Eco.
Russian market status
According to Export Promotion Bureau (EPB) data, Bangladesh earned $460 million from the Russian market last FY, a steady decline from $638 million posted in FY22 and $665 million reported in FY21.
During this period, Bangladesh’s earnings from the apparel sector dropped by $158 million to $426 million year-on-year. The figure was $594 million in FY21.
During FY23, Bangladesh exported fish and crustaceans worth $6.71 million to Russia, which was $8.64 million in the previous FY. Bangladesh also exported jute and jute goods worth $13.81 million to the market during the period, which was $16.13 million in FY22.
Bangladesh’s home textile and footwear sector witnessed a drastic decline in earnings from the Russian market last FY. During the period, the country earned $3.98 million through home textile, which was 10.66 million in FY22.
Bangladesh earned $1.27 million from footwear exports to Russia, compared to 9.74 million posted in FY22.
Chinese market status
Bangladesh – which has duty-free access to the Chinese market for nearly 98 per cent goods – earned only $677 million from the country last FY. Earnings from the market were $683 million in FY22 and $681 million in FY21.
In FY23, earnings from the apparel sector rose by $68 million to $290 million YoY. The amount was $271 million in FY21.
Bangladesh earned $52.85 million from the Chinese market through leather and leather goods exports, compared to $78.67 million in FY22. Besides, jute and jute goods sector earned $121.64 million last FY, which was $169.57 million in FY22.
Bangladesh exported footwear worth $17.90 million to the market last FY, which was $17.71 in FY22. In the last fiscal year, the country exported FISH and crustaceans worth $42 million to the market, which was $17.53 million in FY22.
UAE market status
Bangladesh earned $543 million from the United Arab Emirates through exports in FY23, compared to $864 million in FY22, and $496 million in FY21.
The apparel sector earned $292 million from the UAE market last FY, compared to $282 million in FY22, and $226 million in FY21.
EPB data shows that earnings from home textile – which holds a lot of potential for Bangladesh as an export item – have dropped significantly in the last FY. During the period, the sector earned $108 million from the UAE market, which was $385 million in FY22.
During the last FY, earnings from the jute and jute goods sector dropped by 40.12 per cent to $19.43 million. The amount was $32.45 million in FY22. The country exported cereals and flour products worth $15.34 million to the market last FY, compared to $23.6 million in FY22.
In FY23, the country earned $11.67 million from the market through exports of edible vegetables. The figure was $11.45 million in FY22.
Saudi Arabia market status
Bangladesh’s export earnings from Saudi Arabia – another key emerging market –failed to reach industry expectations in FY23.
During the period, Bangladesh exported goods worth $297 million to the country, which were $291 million in FY22 and $261 million in FY21.
The apparel sector witnessed a big jump in the Saudi Arabia market last FY. During the period, the sector posted a 28.47 per cent year-on-year growth, earning $185 million.
Last FY, Bangladesh earned $34.44 million through cereal exports to Saudi Arabia, which was $42.82 million in FY22. Besides, $20.29 million came through tea exports in FY23, which was $18.14 million in FY22.
Bangladesh exported vegetable plaiting materials worth $12.11 million to the country last FY, which was $27.7 million in the previous year. Bangladesh also exported vegetables worth $9.37 million to Saudi Arabia, which was $11.36 million in FY22.
