Bangladesh experienced a negative growth in export again in October to $4.35 billion, registering a fall in growth of 7.85% year-on-year (YoY).
During the same period last year, the country had bagged $4.72 billion from export earnings, according to data published by the Export Promotion Bureau (EPB) on Wednesday.
The country's export earnings witnessed low growth in September after a positive streak of 13 months since August last year.
October's earnings also followed last month's negative route.
However, the apparel sector, the highest earner among export receipts, earned $3.67 billion in October, fetching a narrow positive YoY growth of 3.27%, which was $3.56 billion in October of last fiscal year, EPB data also said.
Meanwhile, during the first four months of FY23 (July-October), overall exports registered a thin positive growth of 7.01% to $16.85 billion from $15.74 billion in the same period of the last fiscal.
During the mentioned period, apparel export reached $13.95 billion, fetching a YoY growth of 10.55%, from $12.62 billion in the same period of FY22.
Among apparel products, knitwear export reached $7.72 billion, while export from woven items was $6.22 billion with 7.14% and 15.08% growth respectively, compared to FY22.
Among other notable sectors, home textile marked a growth of 5.18% to $434.16 million from $412.78 million in the mentioned period of last fiscal.
Agricultural products registered a negative growth of 23.19% to $353.62 million, from $464.11 million in last fiscal year.
Leather and leather goods registered a growth of 17.42% to $428.46 million, which was $364.9 million in the same period last FY.
Jute and jute products registered a negative growth of 1.96% to $332.98million, which was $326.47 million in the same period of the last FY.
Engineering products marked a negative growth of 47.66% to $177.81million from $339.73million in the mentioned period of the last fiscal year.
Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that the positive growth for apparel export amid this situation was good news.
“But the big challenge is whether it will be possible to sustain this growth. We will try to maintain growth even during these adverse times,” he added.
Due to the ongoing global economic turmoil, domestic power and energy issues, manufacturers are in a tough situation.
Inflationary pressures in the top destinations, decline in placing purchase orders, and deferred orders by top brands made manufacturers suspicious about the growth.
In this regard, Mohiuddin Rubel, additional managing director of the Denim Expert Limited and also a director of the BGMEA, explained that 3.27% is very negligible growth.
“However, we had negative growth last month [September] so it is definitely a positive aspect,” he also said, adding that the export situation was not good and they also anticipated negative growth in October like last month.
Explaining the growth situation, he stated that the stock of goods they had dispatched, and the due payments, may have been cleared this month, sparking this narrow growth.
“Orders are declining. What we have to see now is whether this growth remains in the coming months or not,” Rubel added, expressing that considering the current situation, it may not happen.
“Even if there is such narrow growth, our target won't be achieved,” he added.
However, this growth trend in such a turbulent situation shows that they are still at the top of buyers' choice.
“Buyers still have faith in us even in these difficult times and Bangladesh is on the top, as the safest and most sustainable sourcing hub. That's why we are surviving even amid this turbulent situation,” he added.
Talking to Dhaka Tribune, Prof Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD), said that the October export posted a negative growth due to the war-torn global economy, not to mention a low demand with fears of a global recession.
However, 3% growth in RMG during this period is encouraging, but warns that due to declining orders, impending global recession it doesn't look like there will be any major positive growth until December, he also said.
On the demand side, there are crises. Although exporters gain an advantage from depreciated currency, this growth will not last long if the crisis persists.
Moreover, volume-driven export is also a problem, profit margin is decreasing even as exports increase.
“On the supply side there are also some problems related to power and energy where one should pay attention to this so that the businesses do not suffer,” Rahman added.
Tough times ahead
However, manufacturers also fear a drop in orders as rising fuel prices and inflation have cut the consumers' purchasing power in European countries and decreased the demand for clothing products.
The inflation rate in the European Union (EU), the largest destination of the country's apparel items, reached 9.9% in September this year.
Moreover, the European countries will face further catastrophes as Russia reduces gas supply and leaks surface on two Nord Stream pipelines in the Baltic Sea, which may impact the inflation rate further in the upcoming winter and consumers may be forced to cut their shopping expenses during Christmas.
According to various projections, European shoppers are likely to reduce their Christmas purchases by up to 22% which will disallow the top brands, importers of Bangladesh apparel products, to clear their whole stock.
They also said that the sector needs a few more months, at least till March of 2023, to recover from the losses.
On Sunday, BGMEA President Faruque Hassan said that Bangladesh may not achieve the apparel export target at the end of this fiscal year due to the energy crisis, decline of work orders and high inflation in the European countries.
In the last two months, the sector has noticed multifold crises like a downturn in purchase orders and disruption in the supply of energy and power.