The country’s overall export earnings missed the target by 15.65% or $487m in the wake of a drastic fall in European zone in July, the first month of the current fiscal year.
According to the Export Promotion Bureau (EPB) data released yesterday, Bangladesh earned $2.62bn in the month of July, which was 15.65% less than the target of $3.11bn set for the month.
The government has set an export target of $33.5bn for the current fiscal year.
The EPB data shows that the country earned $1.45bn from Euro zone in July which is 16.29% less than the previous year’s earning of $1.73bn.
Among the sectors, raw jute performed well and exceeded the target by 40.54% after earning $14.63m against the target of $10.41m while leather earned $51.94m, a 1.62% rise against the target of $51.11m.
“The shipment of export-oriented products was delayed because of the holiday on the occasion of Eid ul-Fitr, which caused downswing in export earnings,” Prof Mustafizur Rahman, executive director, Centre for Policy Dialogue, told the Dhaka Tribune.
But this effect is not a sustained one and the export earnings will revive in August, he said.
Mustafizur also urged the government to remove infrastructural barriers and also called RMG entrepreneurs to enhance productivity to remain competitive in the global market as Bangladesh competitors are doing well.
The FY2015-16 July showed 11.96% decline in overall export earnings to $2.62bn compared to $2.98bn in the same month of last fiscal year.
On the other hand, the country’s total export earnings in last fiscal year amounted to $31.2bn, making a 3.39% growth, the lowest in 13 years.
Meanwhile, the country’s RMG export earnings registered a 12% decline to $2.22bn in July, which was the highest since September of FY2009-10 when it registered a 26.83% fall. In July of the last fiscal year, Bangladesh’s apparel sector earned $2.52bn.
As per the data, Knitwear products earned $1.13bn with 13.80% downswing while woven fetched $1.09bn registering a 10.11 fall in terms of earnings.
Meanwhile, in the last financial year, RMG sector, the lifeline of Bangladesh’s export earnings, displayed the poorest performance in six years with over 4% rise.
The apparel sector earned a total of $25.49bn compared to $24.49bn in the previous year.
RMG sector people blamed compliance issues and the rise of production cost in line with the implementation of new wage structure and installation of safety equipment for the drastic fall in export earnings.
The sharp rise in production cost left Bangladesh in tough competitions, which caused sharp decline in export earning, Abdus Salam Murshedy, Exporters Association of Bangladesh president, told the Dhaka Tribune.
“We have to install safety equipment to ensure safety and implement new wages, which pushed the production cost up, and ultimately we lost our competitiveness in the global market,” said Salam.
On the other hand, Bangladesh also lost some production capacities due to closure of factories for safety concerns, and inspection also hinders production, he said.
Fluctuation of exchange rates was another reason behind the slow export growth, Salam added.
