Receipts up slightly in November to $3.1b
Exports last month fetched about $3.1 billion, up slightly from a year earlier, as the economies of the major markets continue to reel from the impact of the first wave of coronavirus with a second wave threatening to sweep across.
November’s receipts, which missed the target by $276 million, takes the earnings so far in the fiscal year to $15.8 billion, up 0.9 per cent year-on-year, according to data from the Export Promotion Bureau.
Bangladesh though is faring better than neighbouring India on this front: India’s exports in November fell 9.07 per cent, in a second straight month of decline.
Garment, which fetches more than 84 per cent of Bangladesh’s export receipts, brought home about $2.4 billion in November, down about 4 per cent year-on-year.
This takes the receipts from the country’s main export earner to $12.9 billion, down about 1.5 per cent year-on-year.
“After the freefall of garment export during March-May and the struggle through June and July, shipments saw meagre growth in August and September. While we were hoping the situation would improve, with the emergence of the second wave the rhythm that we got back is broken,” Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association.
The export data for November shows the impact of lockdowns and slowdown in retail sales in the west, she said, while appealing to the government for a further bailout.
“Since the recovery from Covid may take longer than expected and may prolong until the middle of next year, the industry needs continuity of the support received to stay afloat in the upcoming days along with additional support to withstand any adverse impact,” she added.
The global demand for apparel will not spring back overnight, said Mostafiz Uddin, managing director of Denim Export, a major exporter.
The buyers are in a conservative mode when it comes to placing work orders on fears of a second wave of COVID-19 in the EU and the US, the two major destinations of Bangladesh’s garment shipments, according to Uddin.
“Apparel goods’ export growth will not get any momentum until the global economy recovers from the pandemic. The situation may turn from bad to worse if the second wave turns out to be more lethal than the first wave,” he added.
Commerce Secretary Md Jafaruddin said Bangladesh’s apparel exports would continue to hold up amid the pandemic as the country mostly manufactures low-end products.
“I hope the demand for this segment will not dip much. I am optimistic of a turnaround in exports,” he added.
Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue, blamed the overvalued exchange rate for the slower growth and negative growth in some key sectors.
“Our competitors are enjoying benefits due to this. We are doing better in sectors where there is higher local value addition such as jute and knitwear.”
Bangladesh’s competitors such as Vietnam and Cambodia are doing better in the US.
“So, to survive amid the pandemic, Bangladesh needs to improve its competitiveness, cut the cost of production and increase productivity until the global economy takes off.”
On top of that, Bangladesh should concentrate on free trade agreements (FTAs) in availing duty-free market access, which would give an advantage in grabbing more market share in exports destinations, he added.
Commerce Secretary Uddin said the government is working on signing FTAs and preferential trade agreements
Meanwhile, exports of the other major sectors, such as jute and jute goods, soared 36.7 per cent year-on-year to $553 million in the first five months of fiscal 2020-21.
Agricultural products registered a slight gain of 0.25 per cent to $447 million, while the earnings from frozen and live fish declined 1.1 per cent to $232 million.
Leather and leather goods, the third-largest exporting sector, saw an 8.3 per cent fall to $359 million during the period.
However, export earnings from the pharmaceutical sector rose by 17.4 per cent to $70 million. Earnings from plastic goods declined 10 per cent to $44 million.
The specialised textile sector saw a 2.2 per cent negative growth to $52 million, while home textile products gained 51.6 per cent to $450 million.
Exports of non-leather footwear rose 13.5 per cent to $150 million, which was $132 million.