Exports grow 6.67% in FY23 – solely riding on RMG

The country's exports grew 6.67% year-on-year and reached $55.55 billion in the outgoing fiscal FY23, riding on the extraordinary performance of the apparel sector, according to Export Promotion Bureau (EPB) data released on Monday.

With the latest addition, the merchandise export earnings crossed the milestone of $50 billion for the second consecutive year. The earnings were $52.08 billion in FY22.

The FY23 earnings, however, fell 4.28% short of the $58 billion target amid lukewarm global demand, economic turmoil, geopolitical crisis, and inflationary pressures.

In the single month of June FY23, Bangladesh earned $5.03 billion, up 2.51% compared to the same period of the previous year.

"We are making all-out efforts to diversify apparel products and explore new markets to achieve double-digit growth defying global economic slowdown," said Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association.

Mentioning that the inclusion of high-value items in the country's apparel goods is working as a driving force, he told The Business Standard that exports to new markets, such as Japan, Korea, India and non-traditional ones, are contributing a lot to the export growth.

EPB data shows that apparel exports surged by 10.27% year-on-year to $46.99 billion in FY23, where woven apparel contributed $21.25 billion with a 9.56% growth and knitwear $25.74 billion with a 10.87% rise.

The earnings from apparel items were 0.41% higher than the $46.80 billion target set for FY23.

Faruque Hassan sought government policy support for further diversification of apparel goods, particularly to non-cotton or man-made fibre items, as they are now dominating global markets.

The BGMEA president, however, expressed concerns about a potential decline in Bangladesh's apparel exports in the coming months, as most factories are operating below their full capacity due to low order volumes.

"To explore new opportunities, we are working with several exporters at Texworld Paris. Despite the ongoing unrest in France, the trading situation remains relatively normal there," he added.

Negative growth in other key sectors

Beyond the RMG exports, most of the notable export sectors, including leather, jute, home textiles, agricultural products, and engineering products, registered negative growths in FY23, the EPB data says.

The lather and lather products exports fell by 1.74% year-on-year to $1.22 billion. The export target for the sector was $1.44 billion.

Talking to The Business Standard, Shaheen Ahmed, president of the Bangladesh Tanners' Association, said their sector saw a setback due mainly to the Russia-Ukraine war.

"Besides, non-compliance in Savar tannery estate remains a challenge for Bangladesh," he said and hoped that the global market would turn in a positive direction by the end of this year.

Once billion-dollar-earner jute and jute goods sector, which used to be called "golden fiber", experienced over 19% negative growth to stand at $912 million worth of exports. The earnings from the sector was 29% short of $1.29 billion target for FY23.

"In the just concluded fiscal year, the jute sector went through a hardship, and it was expected as local jute trader-syndicates hiked raw jute prices irrationally over the past years. Some of our buyers have moved to alternative fibres, as a consequence," said Akij group chairman Sheikh Mohammed Nasir Uddin.

He, however, is hopeful that Bangladesh will witness a good growth in the ongoing fiscal year thanks to the government's prompt measures against raw jute hoarders.

"This year, Bangladesh jute farmers saw bumper yields in cultivation, which will naturally stabilise the market," Nasir Uddin said.

Home textile exports experienced over 32% negative growth to stand at $1.09 billion in FY 23. It is 45% lower than the $1.98 billion target.

Talking to TBS, Rashed Mosharraf, executive director of Zaber & Zubair Fabrics, said their sector has not been doing well for long. "It may bounce back after February next if there are no unforeseen circumstances again."

Mentioning that major markets such as Germany and the USA deterred their purchasing, he added that the ongoing Russia-Ukraine war had increased energy and commodity prices, further impacting the home textile sector.

"Moreover, local home textile manufacturers are facing various challenges such as decreased production at factories due to energy shortage, surges in utility prices, and rising costs of raw materials," Rashed Mosharraf said and added that manufacturers are now cutting costs to sustain the business.

Govt revises down FY24 export target 

The government has revised down the export target to $70 billion for the fiscal year 2023-24, considering the turbulent global economic situation.

Earlier in 2022, the Cabinet Committee on Economic Affairs had approved the draft of "Export Policy 2021-2024", setting the $80 billion export target for FY2024.

The new target was set during a meeting of the commerce ministry on 26 June.

Of the total, $60 billion is expected from goods and $10 billion from the service sector.