Record as Bangladesh fetches over $4b for 8 mths in a row

Bangladesh has clocked more than $4 billion in export earnings each month from September last year to this April, thanks to excellent performance in every sector, except for jute and jute goods.

This is a record as the country’s monthly export earnings have never reached even the $4 billion mark.

Moreover, Bangladesh’s export income reached $43.34 billion in the first 10 months of FY22, which was the highest in any fiscal year in history. Previously, the highest amount was $40.53 billion in the entire FY19.

Industry insiders said Bangladesh’s manufacturing sector had continued to receive export orders as it was out of the purview of the Covid-19 lockdown during the pandemic, except for a few days in July last year.

This was not the case in India and Vietnam where the governments enforced strict restrictions on all sectors to prevent the spread of the deadly virus. As a result, buyers turned to Bangladesh, causing exports to grow.

However, stakeholders warned that work orders were falling due to high manufacturing costs while export performance might slightly go down at the end of this year.

“We are currently unable to make enough profits due to high manufacturing costs, but the good news is that we have got many new buyers. Now our main challenge is to retain them for long,” Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association, told The Business Post.

According to Export Promotion Bureau (EPB) data released on Monday, export earnings rose by 51.18 per cent to $4.73 billion in April, which was $3.13 billion in the same month a year ago. EPB targeted $3.37 billion in export earnings in April and eventually fetched 40.66 per cent more than the target.

In that month, 83.08 per cent of export earnings came from the apparel sector, which saw a jump of 56.31 per cent to $3.93 billion, up from $2.52 billion in April last year. The woven garment sector earned $1.81 billion, and knitwear $2.12 billion, during this month.

Besides, Bangladesh earned $43.34 billion from the export sector in the first 10 months of the current fiscal year, registering a 35.14 per cent growth. It was $32.07 billion in the same period of the previous fiscal year.

Industry insiders hope Bangladesh will reach the $50 billion export income milestone for the first time in history before the end of this fiscal year.

After two fiscal years, the leather and leather goods sector earned over $1 billion from exports in the first 10 months of FY22. In the 2018-19 fiscal year, this sector earned $1.2 billion.

Even the jute and jute goods sector, which has been seeing negative growth since the beginning of the current fiscal year, will also cross the $1 billion export income mark for the second time this year, stakeholders hope.

EPB data shows the apparel sector earned $35.36 billion in the first 10 months of FY22, recording a 35.98 per cent growth, while the target was $29.05 billion. This sector earned $26 billion in the same period of FY21.

The home textile sector’s earnings rose by 39.13 per cent to $1.33 billion in the July-April period of FY22, which was $957 million in the same period of the previous fiscal year.

M Shahadat Hossain Sohel, chairman of Bangladesh Terry Towel & Linen Manufacturers & Exporters Association, says export value has risen but profit margin has decreased due to high yarn prices.

“Russia is becoming a new market for us, and buyers there are more transparent than others. But due to the ongoing Russia-Ukraine war, we cannot receive new orders, which will affect our earnings,” he said.

Earnings from leather and leather goods, which is another major export sector, rose by 32.97 per cent to $1.01 billion between July and April of this fiscal year while the target was $852 million.

The agriculture sector also crossed the billion-dollar export mark in this period, earning $1.04 billion with a 26.29 per cent growth. It fetched $824.59 million in the same period of FY21.

The jute and jute goods sector, however, failed to meet the target while its performance fell by 6.68 per cent compared to the same period of the previous fiscal year.

This sector earned $966.51 million, which was $1.04 billion in the same period of FY21. But raw jute exports jumped by 46.11 per cent to $178 million, and most of it went to India.

Esrat Jahan Chowdhury, chief executive officer of Tulika ECO and director of the Bangladesh Jute Goods Exporters Association, said local raw jute prices had risen after exports to India, resulting in a jump in manufacturing costs as well as a decline in exports.

“Besides, most of our export destinations are facing political crises. Freight charges have increased since the beginning of the pandemic, which has caused exports to dip as well,” she told The Business Post.

Meanwhile, the pharmaceutical and plastic goods sectors retained export growth. The pharmaceutical sector earned $128 million in the first 10 months of FY22 with a 27.27 per cent growth while plastic goods brought in $129 million with a 34.08 per cent growth.

Abdullah Hil Rakib, managing director of TEAM Pharmaceuticals, said pharmaceutical is Bangladesh’s next emerging export item. “Now we need huge investment and a good marketing strategy for this sector.”

The frozen and live fish sector earned $464 million with a 17.43 per cent growth, up from $395 million in the same period of FY21.