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Dhaka Tribune

Bangladesh earns a record $55.55bn from exports in FY23

The country's export earnings crossed the milestone of $50 billion for the second consecutive fiscal

Update : 03 Jul 2023, 08:33 PM

Bangladesh earned $55.55 billion in export earnings in fiscal year 2022-23, seeing  a narrow growth of 6.67% year-on-year growth on the backs of the apparel sector, according to recent data by the Export Promotion Bureau (EPB). 

The country's export earnings crossed the milestone of $50 billion for the second consecutive fiscal year. It previously earned $52.08 billion from export earnings in FY22.

However, Bangladesh earned 4.28% less than the export target, which was set at $58 billion, due to the lukewarm demand, ongoing economic turmoil, geopolitical crisis, and inflationary pressures in the destinations.

Apart from the readymade garments (RMG) sector, alarmingly most of the notable export sectors like leather, jute, home textiles, agricultural products, and engineering products saw negative growth in FY23.

In the single month of June during FY23, Bangladesh earned $5.03 billion, fetching a narrow growth of 2.51%, from $4.9 in June of the last FY.

In FY23, the RMG sector, the highest earner of export receipts, earned $46.99 billion, registering a moderate y-o-y growth of 10.27%, which was $42.61 billion in the last fiscal.

Earning details

Among apparel products, knitwear registered a growth of 10.87% to $25.73 billion, while woven garments saw a growth of 9.56% to $21.25 billion, the EPB data also stated.

Leather and leather goods stood as the second highest exporter after RMG, though the sector registered a negative growth of 1.74% to $1.22 billion, lower from $1.24 billion in the last FY. 

Losing the second position, home textile earned $1.09 billion in FY23, fetching a negative growth of 32.47% from $1.62 billion in FY22.

Jute and jute goods also lost their route, fetching a negative growth of 19.4% to $912.25 million in FY23, lower from $1.12 billion in FY22, EPB data stated.

Agricultural products also registered a negative growth of 27.47% to $843.03 million, lower from $1.16 billion of FY22.

Engineering products, considered as another promising export sector, also lost its way as the sector marked a negative growth of 26.37% to $585.85 million from $795.63 million in FY22.

Frozen and live fish registered a negative growth of 20.76% to $422.28 million, lower from $532.94 million in FY22, EPB data stated. 

Apart from the apparel sector, home textile, leather and leather goods sector, and jute and jute goods sector touched the milestone of $1 billion export.

Over-reliance on RMG

Regarding over-concentration on the RMG sector, Prof Mustafizur Rahman, distinguished fellow of the Center for Policy Dialogue (CPD), told Dhaka Tribune that except the RMG sector, the major sectors witnessed negative growths.

“More and more reliance on a sector is a matter of concern. The contribution of the RMG sector to the export was suggested to be kept by 75% by emphasizing other sectors, but now the contribution of this sector is more 84%,” he commented.

He also said that the value retention in other sectors is high, around 90%, while RMG's value retention is 55%-60%, meaning net export earnings are not increasing.

Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said that they were trying their best to diversify apparel products within the sector.

Moreover, they also found new markets which helped them to record double-digit growth despite global economic turmoil and curtailed demands of apparels globally.

“We are currently producing some high-value items which help us to maintain this growth. Moreover, new markets such as Japan, Korea, and India have been contributing to increase nontraditional markets' share,” Hassan also said.

Regarding manmade fibre (MMF) products and diversification, the BGMEA president sought adequate policy support from the government as the MMF's dominance in the global fashion market was rising. 

He also said that a number of manufacturers are participating at the TexWorld Paris to promote Bangladesh's RMG industry and find potential customers, despite an unrest going on there.

Regarding the unrest, he said that a number of stories told of the closure of stores in Paris but everything was normal.

However, he feared that the upcoming months were challenging as the apparel exports of the country may witness a downtrend as most of the factories are running with orders lower than their capacity.

M Shahadat Hossain Sohel, chairman of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association, told Dhaka Tribune that the Ukraine-Russia war changed the whole world and crises persisted in all sectors.

The buying capacity of people has reduced as they are spending more on foods and other essentials due to inflationary pressure. Moreover, to combat inflationary pressures, banks were raising lending rates, which influenced consumer behaviour, he noted.

“If the war situation improves by the end of this year, the sector will rebound from 2024,” he added.

Regarding the latest Heimtextil Frankfurt -- RMG and textile expo in Germany, he said that they didn't get the kind of response they were hoping for as the whole world is going through a crisis.

BGMEA director Mohiuddin Rubel said that exports were slightly higher than the target, however, the growth was heavily influenced by surging prices of raw materials. 

Moreover, increased export of high value products and export to the new markets also impacted the growth. 

There is nothing to take away from this. Orders are decreasing, brands are suffering from overstock due to ongoing economic turmoils, which are hampering consumers' buying capacity, he added. 

Bangladesh has to focus on capacity building, infrastructure, competitiveness, market and product diversification, Rubel added.

Prof Mustafizur Rahman also said that despite a 25% devaluation of the Taka against the dollar, growth in most of the export sectors was negative, meaning lack of competitiveness.

“We usually blame the demand side, but the focus should be given to the internal factors, such as ease of doing business, cost of doing business, competitiveness and many more,” he suggested.

He also opined that in the new financial year (2023-24), everyone needed to focus on internal factors like ease of doing business, product diversification, intra-RMG diversification, infrastructure etc, as well as external factors like market diversification, capturing the global demand trends.

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