Apparel leads export revival

Earnings from merchandise exports grew by 3.53 per cent year-on-year to reach $3.01 billion in September thanks to an increasing number of orders for garment items, according to data from the Export Promotion Bureau (EPB) released yesterday.

Export receipts for September were also 5.92 per cent higher than the monthly target of $2.85 billion, the data showed.

Besides, within the first three months of the ongoing fiscal year beginning in July, export earnings returned to a positive position as merchandise shipments grew by 2.58 per cent year-on-year to $9.89 billion.

Apparel shipments, which typically accounts for about 84 per cent of Bangladesh's export basket, grew by 0.85 per cent year-on-year to $8.12 billion between July and September, which is 2.09 per cent higher than the $7.96 billion target.

Of the total export revenue from garments, about $4.46 billion came from knitwear products, a 7.04 per cent increase in comparison with the sector's earnings from the corresponding period a year ago.

On the other hand, woven products were unable to perform well as the sector's export earnings slumped to $3.88 billion between July and September, a 5.78 per cent decline compared to the same period last fiscal year, the EPB data said.

Garment shipments have been gradually increasing as international retailers have been reissuing work orders that had either been cancelled or deferred between April and June as a part of the coronavirus fallout.

"Sales to major markets gained some momentum in the past two months but price-wise, it is still havoc," said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

International retailers and brands cancelled work orders for garment items totalling about $3.18 billion in value during the April-June period this year, as per the BGMEA data.

But with stores in the European Union, US and Canada slowly starting to reopen, those buyers have started reissuing cancelled work orders, according to various exporters.

As a result, earnings from garment shipments have been steadily increasing.

However, since local spinners can supply raw materials quickly, the frequency of shipments for knitwear products is higher than that of woven.

Currently, about 60 per cent of the raw materials used to make woven products are manufactured from imported fabrics whereas local spinners and weavers can supply 90 per cent of the fabrics needed by the knitwear sector.

This is a big lead time advantage for the knitwear sector, the exporters added.

The country's exports are still in a good position as it is rebounding alongside the reopening of stores in the western world, said Mahmud Hasan Khan Babu, managing director of Rising Group, a leading garment exporter.

If the export figures for garment items remain positive in October, then it can be said that the sector has recovered substantially, he added.

The US is the single largest export destination for Bangladesh as more than $6 billion worth of products, 90 per cent of which are garment items, are shipped to the country each year.

With regard to previously cancelled work orders, Babu, also a former BGMEA president, said a majority of international retailers and branks are taking back those orders.

However, it may take until next March to clear all previous work orders as the process has been slow.

Meanwhile, local suppliers have been settling their payment issues with international buyers through various means. In certain cases, suppliers are accepting payments in instalments.

But the possibility of a second wave of coronavirus infections across the EU and US during the upcoming winter is another source of concern for suppliers as international demand could fall again as a result, he added.

Textile shipments ballooned by 40.74 per cent to $252.35 million while frozen and live fish exports grew by 5.11 per cent to $131.6 million year-on-year in the July-September period of the ongoing fiscal, the EPB data also showed.

In case of jute goods, it was an increase by 39.26 per cent to $307.55 million while for pharmaceutical shipments 20.90 per cent to $42.17 million.

In the same period, shipments of leather, leather goods and leather footwear decreased by 11.49 per cent year-on-year to $225.15 million.