Supply chain disruption caused by lockdowns to stop the spread of the novel virus in both suppliers’ countries and export destinations are largely blamed for the plunge
The country’s exports overall experienced a 17% fall to $33.67 billion in FY20. The big jolt, however, was felt in the last quarter, when exports took the heaviest hit due to Covid-19, crashing by 51.20% to $4.70 billion.
Supply chain disruption caused by lockdowns to stop the spread of the novel virus in both suppliers’ countries and export destinations are largely blamed for the plunge, slashing as it did demand for products.
According to data from the Export Promotion Bureau (EPB), during the April-June period (Q4 of FY20) of 2020, Bangladesh’s exports earnings declined by 51.20%, or $4.93 billion, to $4.7 billion against $9.63 billion in the same period last year.
However, in the first six months (Jan-June) of 2020, the country’s exports earnings declined by 28.27% to $14.27 billion against $20 billion in the same period last year. During the period, the country’s exporters lost trade worth $5.66 billion.
The jolt in the country’s exports earnings was initially felt in March, when it saw an 18.2% fall.
In April and May, the country saw the worst case of export earnings, as it nosedived 82.85% and 61.57% to $520 million and $1.46 billion respectively.
In June, however, exports recovered from the losses gradually and at the end of the month, they posted a 2.5% decline to $2.71 billion, which was $2.78 billion last year.
The fall in export earnings was mostly driven by the slump in the apparel sector as well as leather and leather goods.
These two sectors contributed 85.37% or $28.75 billion to the national export earnings of $33.67 billion.
During the April-June 2020 period, export earnings plunged by 53% or $4.33 billion to $3.84 billion, which was 8.18 billion in the same period a year ago.
Meanwhile, during January-June 2020, apparel exports fell by $5.12 billion to 11.92 billion, which was $17.05 billion in the same period last year.
This was due to work order cancellations or stalling orders by global apparel buyers, retailers and brands as a result of the pandemic.
According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data, global apparel buyers stalled or cancelled work orders worth $3.18 billion due to the pandemic.
On the other hand, leather and leather goods exporters saw work orders on hold or subjected to cancellation worth $200 million.
The leather and leather goods sector registered a 22% fall to $798 million in FY20.