Bangladesh received $3.47 billion in export earnings, down from the $3.91 billion earned in July last year
The sudden dip in export earnings in July this year will not impact the economy much and Bangladesh will soon be able to recover, say economists and exporters.
They are optimistic that exports will increase in the coming months as events. Professor Mustafizur Rahman, a distinguished fellow of the Centre for the Policy Dialogue (CPD), said the situation is temporary.
Export earnings saw a 11.19% year-on-year plunge in July, according to latest data released by the Export Promotion Bureau (EPB).
Bangladesh received $3.47 billion in export earnings, down from the $3.91 billion earned in July last year.
“Bangladesh will recover from the situation soon. We do not need to judge the entire 2021-22 fiscal year by only the earnings of July. There is no reason to worry about it,” he added.
He also said that exports were hampered in July due to Eid holidays, factory closures amid lockdowns, and container congestion at the Chittagong port.
“But Bangladesh is still getting a lot of purchase orders and a huge number of containers are ready to be shipped,” Professor Rahman further said.
The apparel sector, which accounts for more than 83% of the total export earnings of the country, is getting a lot of purchase orders which are shifting to Bangladesh from China, India, Myanmar, and Vietnam.
Moreover, products prepared before Eid were also exported after the vacation.
A large number of containers with products at the Chittagong port are waiting to be shipped and exports will turn around again in the coming months, said industry insiders.
“All export-oriented factories reopened from August 1 and are now carrying on with production in full swing,” Professor Rahman further said.
“We hope exports will recover in August, and Bangladesh will soon return to pre-pandemic levels. This will not have any negative impact on the national export economy, so there is no reason to panic,” he added.
Apparel manufacturers also agreed with Professor Rahman, saying that this dip is temporary as they have enough purchase orders from retailers in the EU and the US markets — the main destination of Bangladesh's readymade garments products.
Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said they are very optimistic about export performance in the coming months as manufacturers receive a lot of orders from buyers right around this time of the year.
“Despite the lockdown, all export-oriented factories, including those in the garments industry, have been reopened, which will boost production and increase shipments. We are expecting good days ahead,” he added.
If all goes well, the sector will be able to overcome the export situation of July and will also overtake Vietnam again, he further said.
Vietnam has narrowly overtaken Bangladesh’s position as the second largest global exporter of RMG products.
In July, export earnings from woven products declined 18% year-on-year whereas that from knitwear shipments fell 5%.
However, Fazlul Haque, vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), is also not alarmed by this drop.
He said Bangladesh ships clothing items worth $100 million daily, and exports were affected because of the lockdown and the container congestion at the Chittagong port.
“Demand for woven garments also fell as people mostly stayed indoors in the export markets because of the pandemic. But they have already opened shops following mass vaccination, which will increase the demand,” he added.
July also marked a gloomy season for jute and jute goods exporters, as the earnings from this sector slumped 41% year-on-year to $60.7 million.
However, Moniruzzaman Mridha, vice-president of the Bangladesh Jute Spinners Association (BJSA), explained that exports soared in the last fiscal year mainly in terms of value, not in terms of volume.
“The jute industry has been lagging behind for a long time due to the pandemic. Illegal stockpiling of jute should be stopped. Many unlicenced people are entering the industry despite not having industrial knowledge, they need to be controlled,” he added.
He also said that steps should be taken to boost domestic consumption by implementing the governmental instructions of using jute bags for packaging.
Among other notable items, agricultural products, which hit $1 billion in export earnings last fiscal year, saw a 3% plunge. Frozen fish exports slumped by 13%.
Home textile product exports collected $92.36 million this July, 1.76% lower than that in July last year.
Leather and leather goods — another major foreign currency earner — posted a marginal 1% gain, fetching $90.5 million in July, up from $89.9 million in the same month last year.
Although vegetables, wigs and human hair, waste plastic, and headgears have also shown positive growth, it was not enough to prevent the overall plunge in export earnings.
Bangladesh raked in $38.75 billion worth of export earnings in FY21 — a 15.1% year-on-year growth.