Exports contracted 14.6% year-on-year to $33.6 billion in 2020
With December’s data rolling in yesterday, we have the clearest picture yet of the damage inflicted on Bangladesh’s exports in 2020: the receipts were the lowest in five years.
Exports slumped 14.6 per cent year-on-year to $33.6 billion last year, according to data from the Export Promotion Bureau.
And in December, shipments raked in $3.3 billion, down 6.1 per cent from a year earlier, making Bangladesh the only country in South Asia to see its exports decline last month.
Garment, which brings home the lion’s share of export earnings, posted a 17 per cent drop in receipts to $27.5 billion.
And last month, export receipts from garment shipments were down about 6.9 per cent from a year earlier at $2.7 billion.
“We should not count or consider the figure as it is,” said Faruque Hassan, managing director of Giant Group.
Last year was an abnormal year for the global economy, he added.
“It was a dark year for the industry,” said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association.
To put things into perspective, the Christmas sales in the Western world were the lowest in recent memory for the second round of lockdowns in much of the EU and the US, she added.
“To sell products, you have to have a buyer. With people dying or falling ill, who would buy goods?” asked Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.
In addition, amid the economic slowdown people focused on basic needs and were more cautious in spending fearing the pandemic would take a turn for the worse, he added.
“This brought down the demand for fashion goods as well as others non-essentials down,” said Faruque Hassan, a former senior vice-president of the BGMEA.
The crisis deepened further as the second wave of Covid-19 compelled several countries in Europe and the US to go into fresh lockdowns.
“Thus, we lost our exports,” said Hassan, also the managing director of Giant Group.
Seeing the relatively poor administration and unavailability of the Covid-19 vaccine, Huq thinks it would not be until April that things start looking up on the export front again.
“We should chalk out plans for 2021 by taking the lessons from the previous year,” Hassan said.
The biggest challenge is the price of goods as buyers are not willing to offer better prices; rather, they are cutting it continuously.
Since September, the prices of apparel items from Bangladesh declined about 5 per cent, according to Huq.
“The buyers are also suffering as their sales fell, too,” Hassan said.
In addition, the prices of cotton went up leaving manufacturers with another challenge in their hands.
In the given context, the government should provide policy and financial support to come out from the impact of the second wave of Covid, he added.
“I hope Bangladesh's exports will be able to recover by the second half of 2021 as vaccination started in the export destinations,” said Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue.
He went on to suggest the country be ready for the post-covid world as the supply chain and economic activities will emerge with a new dimension.
“In the post covid era, the export market, especially garment, would be totally different, where environment, labour rights, health safety and compliance will be more crucial,” said Mansur, also a former economist of the International Monetary Fund.
Technological upgradation and adoption of new technology to communicate and for product development will be at the heart of the supply chain.
“We need to be well equipped for this,” he added.
Meanwhile, receipts from the shipment of leather and leather products, the next big earner, declined 20 per cent to $768 million, but jute and jute goods soared 13.6 per cent to $1 billion.
Pharmaceutical exports rose 10.8 per cent to $148.40 million, while home textile grew 15.2 per cent to $936 million.
Agriculture product exports declined 5.7 per cent to $863 million and frozen and live fish about 6.5 per cent to $445 million.