Exports booming despite gloomy global outlook
Earnings from merchandised exports from Bangladesh soared 51.18 per cent year-on-year in April to $4.73 billion helped by higher shipment of garments, home textiles and footwear, official figures showed yesterday.
The higher flow of export receipts continues despite persisting global uncertainties emanating from the Russian-Ukraine war, dragging supply chain disruptions, and higher inflationary pressures.
In fact, exports from Bangladesh have been posting stellar growth since September, sending monthly receipts above $4 billion for the first time in the country's history, as demand rebounded in the western economies in keeping with the receding coronavirus pandemic.
Earnings hit an all-time high of $4.9 billion in December and the momentum continued in the subsequent months.
Between July and April, the first 10 months of the current fiscal year, earnings surged 35.14 per cent year-on-year to $43.34 billion, according to data from the Export Promotion Bureau (EPB).
With the improvement of the Covid-19 situation worldwide, the global apparel supply chain is also recovering fast. As a result, exports from Bangladesh are growing at a faster clip.
From July to April, apparel shipment, which accounts for about 85 per cent of the national exports, swelled by 35.98 per cent to $35.36 billion.
Of the total, $19.24 billion came from knitwear shipments, up 37.49 per cent, and $16.11 billion from woven shipments, a rise of 34.23 per cent.
The buoyancy in the shipment of apparel came as international clothing retailers and brands are flocking to Bangladesh in droves to place orders as many other producing countries are struggling to meet rebounding demand.
Orders are shifting from China, India, Pakistan, Vietnam, Sri Lanka, Myanmar and Ethiopia to Bangladesh as the cost of production has gone up there.
"Export will keep growing until July because local suppliers have received a significant volume of orders," said Md Shahidullah Azim, senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association.
Manufacturers are now taking orders for October and November seasons.
However, they are selective in booking orders as the prices of raw materials such as yarn, fabrics and chemicals have increased at home and abroad in order to avoid losses, said Azim.
"Many suppliers suffered losses as they had to supply goods even at lower prices as they had booked orders before the prices of the raw materials went up."
The entrepreneur says the Russian-Ukraine war has had little impact on the garment export until now as the shipment is growing every month.
However, if the war continues, it might have an impact on the export as consumers in the western economies would face higher inflationary pressures.
Eurozone inflation soared to 7.4 per cent in March, an all-time high for the currency club, while inflation in the US hit 8.5 per cent in the month, the sharpest annual rate since 1981. The EU and the US are the two biggest markets for Bangladesh.
Besides, Bangladesh has already lost the Russian market due to the war as the export to the country is declining.
Before the war erupted, it was expected that the export of garments to Russia would cross the $1-billion mark at the end of the current fiscal year, for the first time. The milestone might not be hit in 2021-22 as the conflict shows no sign of abating.
"We need to improve the ease of doing business significantly to be more competitive in the international markets," Azim said.
Earnings from leather and leather goods shipment grew 32.97 per cent to $1.01 billion in the July-April period, data from the EPB showed.
Frozen foods and live fish exports grew 17.45 per cent to rake in $463.62 million and agricultural products exporters brought home $1.04 billion, an increase of 26.29 per cent, year-on-year.
Jute and jute goods shipment, however, declined 6.68 per cent to $966.51 million.