Exports hit 32-month high in July

The country's exports rose to $4.77 billion in July, up nearly 25 percent from $3.82 billion a year earlier, according to the Export Promotion Bureau (EPB), marking the highest monthly earnings from merchandise shipment since November 2022.

Key contributors to the growth in the first month of the new fiscal year included pharmaceuticals, leather goods, engineering products and an increase in ready-made garment (RMG) shipments.

Frozen fish, vegetables and tobacco also performed well, while tea and glassware exports fell.

This development came just a day after the Bangladesh Bank reported a 29 percent year-on-year increase in remittance income in July, maintaining buoyancy as more than 40 lakh Bangladeshis have gone abroad for work over the past four years.

After the political changeover in August last year, exports and remittances together have helped ease pressure on the foreign exchange reserve.

The country's external balance returned to surplus in the recently concluded fiscal year 2024-25, following three years of persistent deficits.

Anwar-ul-Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries (BCI), said the export growth did not come from exceptional demand or from front-loading, a practice where exporters rush shipments in anticipation of tariffs or other supply chain issues.

"The nearly 25 percent export growth in July was not a response to looming American tariffs, but rather a result of seasonal factors and a low base in that month last year," said the business leader.

He pointed out that political unrest in July last year had disrupted production, with many factories unable to operate fully. "This year, production did not face similar incidents," he said.

"So, the growth reflects a seasonal rebound rather than extraordinary demand."

Although the July figures appear promising, Parvez urged caution. "US and European buyers are still hesitant. Some were holding back orders until early August."

He added that exports might fall in August and September, typically a lean period. "Things should begin improving again from October."

Parvez also talked about the potential impact of the United States reducing reciprocal tariffs to 20 percent from 35 percent. He said there was no immediate effect.

"But, if retail prices rise by even $2 to $3, hypermarkets like Walmart and Target may cut volume. Sales could drop 30 percent to 35 percent."

Most current shipments are part of the winter collection and are expected to continue through mid-August. Summer and Christmas products will begin shipping from September.

"Many orders were booked earlier, but final confirmation was delayed. This week is key. It may take three to four more months for full clarity," he said.

Asif Ibrahim, vice chairman of Newage Group and a former director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the strong performance in July was driven by a mix of global and domestic factors.

"One major driver was the front-loading of orders by international buyers, especially from the United States," Ibrahim told The Daily Star. "Concerns over potential tariff hikes led many brands to speed up their shipments, pushing a large volume of orders into July."

He added that geopolitical tensions and trade uncertainties, particularly around China, had reshaped global sourcing strategies. As buyers looked to diversify, Bangladesh gained ground as a reliable option.

Ibrahim said traditional markets such as the European Union, United States and Canada continued to show strong demand, while non-traditional markets, including Japan, India and Australia, saw rapid growth.

He also commented that Bangladesh's improved compliance in factories, greater efficiency and rising focus on sustainability had made the sector more competitive globally.

"These combined dynamics created an unusually high volume of exports in July," he said. "It is a positive signal for the sector's performance in the quarters ahead."

Pharmaceutical exports saw the highest growth, jumping 61.85 percent year-on-year to reach $19 million, up from $12 million in July last year.

Wasim Haider, international marketing manager at Beximco Pharmaceuticals, said the surge likely resulted from multiple overlapping factors.

"This kind of jump is unusual for July," he told The Daily Star, pointing to delayed June documentation and new product approvals as possible reasons.

In July, leather footwear exports rose by 26 percent. But Nasir Khan, chairman and managing director of Jennys Shoes, said the gains could have been far greater if not for delays and corruption.

"Our shipments often stall at ports due to slow bond clearances," he said, adding that exporters face demands for "bribes up to Tk 5 lakh just to move files."

Khan claimed that a network of "unofficial lobbying quarters" and influential officials had taken control of key export approvals, holding back one of the most promising sectors outside the RMG industry.

Despite rising global demand, he said red tape, middlemen and "grease money" continue to undercut the sector's full potential.