Q1 exports gain strength

Exports have maintained a steady growth for the third month in a row amid pandemic shocks as a recovery in the apparel sector raised the country's total earnings from merchandise sales by 2.58% to $9.89 billion in the first quarter of the current fiscal year over a year-ago period.

The growth came on the back of an impressive 7.04% rise in knitwear garment exports in the July-September of the fiscal 2020-21, offsetting a 5.78% decline in the woven segment, according to a provisional data of the Export Promotion Bureau (EPB).

Though knitwear maintained its strength in the first quarter, the woven sector continued to perform lower, posting a negative growth in the previous two months too.

Knitwear has appeared to be the country's number one export earner, fetching $4.46 billion, followed by $3.66 billion from woven, putting the total earnings from readymade garments at $8.12 billion.

Since apparels still account for 82% of overall exports, a marginal 0.85% growth gave a boost to overall earnings in the quarter that ended in September.

However, the overall export strength continues as global demand rebounds for jute goods, agricultural products, frozen fish, home textile and non-leather footwear.

With $307 million, jute has emerged as the second biggest earner from the global market, posting a 39% growth, while the leather sector showed a dismal performance, dropping 11% to $225 million in the first quarter.

Among other manufacturing goods, pharmaceuticals showed about 21% growth, though the amount was small – $42 million.

Exports saw 0.59% growth in July, while July-August figures were 2.17% up from the earnings seen in the same period of the last fiscal.

Apparel exports in July were less by nearly 2% year-on-year, which were compensated by significant growth in jute, pharma, carpet, non-leather shoe, home textile, agricultural products and fish exports.   

"The overall growth in export earnings in the first quarter of the current fiscal year indicates that our exports have been going in the right direction, but it is still in the recovery stage," said Ahsan H Mansur, executive director at the Policy Research Institute.

The RMG sector has made a turnaround in the first quarter after having gone through a continuous downtrend in the last fiscal year.

"This positive growth does not mean that we have come out of the Covid-19 pandemic. We have to be more cautious about the possible second wave of coronavirus in the European Union," he pointed out.

"The apparel shipment has bounced back on the positive track, it is good news for the industry people," said Faruque Hassan, managing director at Giant Group, one of the leading apparel exporters.

He also expressed gratitude to the government for taking timely initiatives to help the apparel sector deal with the pandemic.

He attributed this growth to the reinstatement of the cancelled and held-up orders.  

"Buyers are now placing new orders but we are struggling to get good prices," said Faruque Hassan, also former senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

"Despite the pandemic, we have come back on the right track, it happened due to two major reasons – our brave workers joined at work to produce apparels as per buyers' requirement and the government financial support acted as a lifeline, otherwise we could not able to survive," said Fazlee Shamim Ehsan, director at the Bangladesh Knitwear Manufacturers and Exporters Association.

He also hoped that the sector will shine in the coming days as they have available orders for November onward.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, said, "Our apparel export has been doing well even at this time of the pandemic, riding on knitwear which holds a big share in the European Union's diversified markets.

"We have also cashed in on the newly created demand for safety apparel items but the EPB data has no mention of it."

As the lead time has shrunk, Zahid Hussain recommended that the National Board of Revenue and the port authorities cooperate with manufacturers to release imported raw materials and allow quick shipments of export products.

Dr Rubana Huq, president at the BGMEA, said, "Retail sales in our major markets have gained some momentum in the past two months, so there is a surge in orders. But price-wise it is a havoc."