Exports hitting the bumpy road

Overseas shipments raked in $2.9 billion in October, down about 6.5% from a year earlier, in what can be viewed as the harbinger of the cold, harsh winter that lies ahead for Bangladesh’s exports as a second wave of coronavirus cases sweep much of the Western world.

Last month’s receipts also missed its target by $190 million, according to data from the Export Promotion Bureau.

Garment, which fetches more than 84% of the export receipts, brought home $2.3 billion in October, down 8% year-on-year.

“This warns about faltering recovery in global demand and trade,” said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association.

October’s earnings take the export receipts so far this fiscal year to $12.9 billion, up 1.6% year-on-year.

But the road ahead would definitely be bumpy given the second wave of cases in much of the Western world, the main destination of Bangladesh’s exports.

“It’s a matter of concern,” said Zahid Hussain, lead economist of the World Bank’s Dhaka office.

The bump in exports seen from June onwards was due to clearing the backlog as coronavirus brought most of the world to a standstill between March and April. There were some new orders too for Christmas, he said.

“But now, there is clearly a slowdown,” Hussain added.

New orders are just not gushing in, said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.

He expects the export receipts to go down further before picking up in April-May.

“Recovery won’t be quick. And this will have an impact on employment and GDP. The balance of payment won’t be hampered much as imports are not rising as fast,” Mansur added.

The question now is how long or how deep the second wave would be in the EU and the US, Hussain said.

“This is worrying for us since Europe is our major market,” Huq said.

And there is nothing much that can be done,Hussain said. 

Among other major sectors, jute and jute goods export soared 40.2% year-on-year in October to $131.2 million.

Shipment of leather and leather products, the third big export earner, slipped last month: it dropped 7 per cent to $58.1 million. Agricultural exports dropped 8% in October to $87.3 million.

Export earnings from the pharmaceuticals sector rose by 19.8% to $56 million between July and October.

Hussain said the government can now push for more pharmaceutical exports seeing that there is a well-established industry in Bangladesh.