Bangladesh’s export earnings rose by over a half in September to $3.15 billion, the highest receipt the country has made since July 2012, according to data of the Export Promotion Bureau (EPB).
Driven mainly by the apparel sector and the delivery of shipments pending from August, exports posted a sharp rise of 54.64% in September.
In August, the country’s export earnings posted a near 12% negative growth as the Eid-ul-Azha holidays hindered production in the manufacturing sector, and particularly in the apparel industry.
“There was roughly a ten-day vacation (when) the production activities of the RMG sector remained suspended and shipments were largely halted,” Bangladesh Garment Manufacturers and Exporters Association (BGMEA) senior vice president Faruque Hassan told the Dhaka Tribune.
“As a result, it hurt the total export earnings as the sector contributes over 83% to the country’s overall export proceeds. Since the pending shipment was delivered in September, the overall export as well as the apparel export posted a robust growth.
“In addition, there are more work orders coming from the buyers in recent period compared to the previous year as the safety standard improvement in local readymade garment industries restored buyers’ confidence on Bangladesh,” said Hassan, who is also the managing director of the Giant Group.
Meanwhile, in the first quarter of the current fiscal year, EPB data shows that Bangladesh’s export earnings have risen 14.75% to $9.94 billion.
“The positive sign in the export earnings is a balanced growth took place in other sectors beyond the RMG industry,” Centre for Policy Dialogue (CPD) research Director Khondaker Golam Moazzem told the Dhaka Tribune.
“If the growth was demand-driven, in the coming months Bangladesh’s export would see even better and steady growth as the US job market has been enthusiastic, creating more demands and enhancing purchase capacity of US consumers.”
Apparel sector in driving seat for the sharp rise
The RMG sector has been the catalyst for the sharp rise in export earnings as the sector contributed $8.19 billion to the overall figure of $9.94 billion during the July-September quarter.
This was an increase of 14.66% on the $7.14 billion earned in the same period a year ago.
Of the total, knitwear products earned $4.20 billion posting a 12.27% growth, while woven products contributed $3.98 billion, a rise of 17.30%.
In September alone, the country’s export earnings from the apparel sector rose by 51.65% from the same month of the last fiscal year, from 1.62 billion to $2.45 billion.
Exporters seek policy support to retain the growth
In maintaining the growth trend momentum, the sector people sought the continuation of policy supports and the protectionist trade war between the United States and China.
“The global trade situation is now in favour of Bangladesh (since) China has increased tariffs on the import of clothing products from India, while US-China trade war created better opportunities for Bangladesh,” Exporters Association of Bangladesh (EAB) President Abdus Salam Murshedy told the Dhaka Tribune.
“To remain competitive in the global market and to retain the growth rate, the government has to be more pro-business by establishing a congenial business environment and offering fiscal incentives.”
Salam, also a former president of BGMEA, said the new wage structure will be implemented from December.
“(This) will increase the production cost so the government should lower tax at source for the RMG sector to reduce the burden of new wages”, he said.
Export performance of major sector in the first quarter
Among the major sectors, agricultural products have posted a sharp rise by 97.31% to $292.82 million in the first quarter of the current fiscal year, which earned $148 million last year.
In addition, export earnings from the pharmaceuticals sector rose by 24.55% to $30 million, plastic goods by 19.20% to $27 million, and specialized and home textiles by 55% and 4.8% respectively.
However, earnings from leather and leather goods witnessed a 17.46% negative growth to $268 million during the period, which was $324.62 million last year. Jute and jute goods , the third largest export earners, registered a 8.15% negative growth to $217 million.
Exports of frozen and live fish fell to $138 million from $168 million in the same period of the last fiscal year.
