Apparel exports grew by 12% in Jul-Jan of FY25

Highlights:

• Apparel exports grew 12% in July-January FY25
• January 2025 export earnings up 5.7% from January 2024
• Cumulative export earnings up 11.68% July-January FY25
• FY25 export target set at $50 billion

The country's apparel exports grew by 12% year-on-year to $23.55 billion in the first seven months of fiscal 2024-25, according to government data. 

Overall exports exceeded $4 billion for four consecutive months from October to January. In January, shipments reached $4.44 billion, marking a 5.70% year-on-year growth, according to Export Promotion Bureau (EPB) data released on Monday (3 February). 

The EPB's report reflects real-time shipment updates via the ASYCUDA World system from the National Board of Revenue. Cumulative export earnings for July-January showed an 11.68% growth compared to the same period last year.

However, after experiencing consecutive double-digit growth over the previous four months from September to December, the apparel sector's earnings growth slowed to 5.70% in January. 

The single-month export value stood at $3.66 billion. Of this, the knitwear sector posted relatively higher growth of 6.62%, while woven garment export growth was recorded at 4.52%, according to EPB data.

"The growth figures are encouraging; however, they do not fully reflect the challenges faced by the industry, particularly the pressure on prices and costs," said Mohiuddin Rubel, a former director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and additional managing director of Denim Expert Ltd.

"Further analysis is required to identify the specific factors influencing this trend, such as market-specific performance, product and market concentration, and other variables." 

Global trade is estimated to have shrunk significantly last year, leading to intense price competition. Amidst the looming trade war, there are some opportunities for Bangladesh's RMG sector, he said. 

However, several priorities need to be addressed to support business operations, including energy security and stability in the financial and banking sectors, he added.

According to EPB data, other major export sectors, including leather and leather goods, agricultural products, home textiles, frozen fish, and plastic products, also demonstrated positive growth, reinforcing Bangladesh's strong presence in global markets during the July-January period. 

Home textiles posted positive growth, increasing by 6.22% to $493.86 million, compared to $464.93 million in the same period of the previous fiscal year. 

Export earnings from agricultural products in the seven months to January rose by 10.59%, reaching $673.84 million, up from $609.32 million in the same period of the previous fiscal year. 

The leather and leather goods sector experienced 8.08% growth, with earnings rising to $669.03 million from $619.04 million in the July-January period, according to EPB data. 

Another emerging export sector, engineering products, recorded 9.03% growth, with earnings increasing to $293.47 million from $269.17 million in the previous fiscal year.

However, during the July-January period, export receipts from jute and jute goods experienced a decline of 8.35%, totalling $484.31 million, down from $528.44 million a year ago, EPB data revealed. 

The export target for FY25 has been set at $50 billion, representing a projected growth of 12.44% year-on-year. This ambitious target underscores the country's commitment to expanding its global trade footprint and strengthening its position in the international marketplace.

Talking to TBS, Abdullah Hil Rakib, managing director of Team Group, said the industry has an opportunity to grow further, considering the order situation in the global market. Businesses are likely to move away from China, as the US government is expected to increase import duties by a further 10% on Chinese goods.

"The government has shown no intention of formulating policies in line with the industry's needs and potential," he said, adding, "Our policies contradict the requirements of the industry," he said.

"Everywhere, policies are being revisited in line with the recommendations of the IMF. We should follow their suggestions, but this will take time. Otherwise, the industry will not survive."

Referring to Singapore, BGMEA's former senior vice president Rakib noted that the country achieved economic growth without following any IMF recommendations.

BKMEA President Mohammad Hatem said that in the past couple of months, some orders have increased, but prices remain challenging for exporters due to rising production costs. Adequate utility supplies also remain a challenge for the industry to meet buyers' lead times. 

He added that the law and order has still not normalised, which is crucial for regaining buyers' confidence.