Exports show promise as US, EU markets reopen
Bangladesh's merchandise export earnings increased by 4.32 per cent year-on-year to $2.96 billion in August following a rise in demand due to the reopening of retail stores in the EU and US markets.
Experts attributed the hike in earnings to the release of goods in June and July, which were stuck in warehouses because of the ongoing Covid-19 pandemic.
"We expected a faster recovery but it is taking a bit of time as the western economies are taking some time to fully reopen their doors," said Arshad Jamal Dipu, vice-president of the Bangladesh Garment Manufacturers and Exporters Association.
Garment shipments began rebounding in July, when international retailers and brands started returning to Bangladesh with new work orders while also accepting previously cancelled ones.
However, export receipts in August were 11.72 per cent lower than the monthly target of $3.36 billion, according to data from the Export Promotion Bureau.
Moreover, garment shipments decreased by 0.06 percent year-on-year to $5.71 billion between July and August even though overall export earnings grew 2.17 per cent year-on-year to $6.87 billion at the same time.
Of the total garment export, $3.11 billion came from knitwear and $2.59 billion from woven.
During July-August period, knitwear exports saw a 6.64 per cent increase year-on-year while woven fell by 7.06 per cent, according to the data.
Meanwhile, total export earnings in July grew by 0.59 per cent year-on-year to $3.91 billion, which was also 13.39 per cent higher than the monthly target of $3.44 billion.
Usually July, August and September are lean months for the apparel sector as garment shipments remain slower compared to other months, said the vice president of the garment makers' platform.
"This is why the shipments were in a slow lane," he added.
However, it is expected for the garment sector to recover in line with the rise in export orders as Bangladesh is very strong in the production of medium and basic garment items, Dipu continued.
In April, Bangladesh experienced a deep fall in exports as almost all the stores were closed in the EU and US markets while local factories were shut down as well to curb the spread of coronavirus.
That month, overall export earnings were $0.52 billion with the apparel sector's contribution being $0.37 billion.
In May, $1.23 billion out of the overall export earnings of $1.46 billion came from garments sector.
In the month after that, earnings from overall shipments hit $2.71 billion, with $2.28 billion coming from apparels, the EPB data added.
Shipments of personal protective equipment and other isolation or medically related fabrics also increased due to high demand for those items worldwide amid the ongoing pandemic.
The release of funds from the government's Tk 10,500 crore stimulus packages aimed at export-oriented sectors also helped them continue doing business despite the COvid-19 fallout.
In July and August, jute exports increased by 49.64 per cent year-on-year to $195.39 million while agricultural products like tea, vegetables, tobacco, fruits and spices increased by 32.64 per cent to $178.27 million.
At the same time, carpet exports spiked by 63.56 per cent to $6.15 million, home textile by 43.87 per cent to $168.03 million while footwear (sans leather) increased by 28.32 per cent to $73.95 million.
On the other hand, shipments of frozen and live fish like shrimp decreased by 10.01 per cent year-on-year to $74.56 million during the two-month period while leather goods declined by 16.54 per cent to $154.74 million as ceramics and bicycle exports also fell.