Bangladesh’s export earnings have failed to make a turnaround in November, missing the target by 18 per cent leaving businesses and analysts worried.
The apparel sector, irrespective of its 83 per cent contribution to the export earnings in the July-November period, resulted in the export earning taking a hit by marking a 7.74 per cent year-on-year decline.
As per experts and economists, the declining business competitiveness especially that of the readymade garment sector and a fledgeling global economy kept taking toll on Bangladesh exports in November with earnings falling by 10.70 per cent in the month.
As per data released by the Bangladesh’s Export Promotion Bureau (EPB) recently, the country’s export earnings in July-November of FY20 fell to US $ 15.77 billion from what was US $ 17.07 billion in the same period of FY19.
Further, the export earnings in November of FY20 declined to US $ 3.05 billion from US $ 3.42 billion in the same month of FY19. The earnings fell by 11.49 per cent in August, 7.30 per cent in September and 17.19 per cent in October of FY20.
The overall export earnings in the 5 months of FY20 fell 12.59 per cent short of the Government-set target of US $ 18.05 billion for the period.
After seeing the November export data, BGMEA President Dr. Rubana Huq termed the export performance, ‘truly very bad’ and ‘deteriorating by the day’. “All our orders are being diverted to Vietnam or India,” said Rubana calling upon the Government for urgent policy support to get over the situation.
She also demanded separate Taka-Dollar exchange rate for the sector apart from cash incentive.
Rubana’s claims seem valid enough considering the export performance of many of its competitors.
“The EPB data spots another dent in the export growth curve. Such continuing negative growth (for 4 months in a row) last happened in the March-June period of FY12,” claimed the BGMEA President, adding, “The latest data from the official source of the US and the EU show that Bangladesh is significantly lagging behind our competitors in terms of growth during the third quarter of 2019, i.e. July-September 2019. During this period Bangladesh registered 1.70 per cent growth in the US whereas Vietnam grew by 14.23 per cent, India 3.93 per cent, Cambodia 15.56 per cent and Pakistan 6.58 per cent. The picture in Europe was not much different as Bangladesh had seen only 0.90 per cent growth during the quarter, whereas the growth of Turkey was 2.98 per cent, Vietnam 2.88 per cent and Sri Lanka 6.17 per cent,” Rubana underlined.
She further added that such a decline testified that the competitiveness of the RMG industry in Bangladesh was really in danger and the country was not aligned at all with the global competitive scenario; particularly the exchange rate movement of the Taka against the competing currencies remained inconsistent.
Meanwhile, commenting on the recent development in the export front, Executive Director of Policy Research Institute Ahsan H. Mansur said, “Global economy has been facing a recession warning situation and the European Union is now the weakest market in the globe in terms of economic growth. Bangladesh depends largely on the EU market and the country’s export earnings growth is intertwined with the EU economic growth,” while adding that Bangladesh was lagging behind competitors like Vietnam due to its overvalued currency.
Ahsan also blamed the rise in production costs against low prices offered by the foreign buyers as a cause behind this export drop and advised devaluation of Taka against US dollar so that the exporters can remain competitive.
Apart from readymade garment, leather and home textiles exports also fell in this period.
The export earnings from leather and leather goods in July-November of FY20 fell by 10.03 per cent to US $ 391.09 million from what was US $ 434.7 million in the same period of last fiscal year while export earnings from home textile in the 5 months of FY20 declined by 12.34 per cent to US $ 298.65 million from US $ 340.70 million in the same period of FY19.
The export earnings from jute and jute goods in July-November of FY20, however, grew by 15.16 per cent to US $ 404.79 million from US $ 351.50 million in the same period of FY19.