October exports fall but RMG sees over 3% rise
Despite an overall fall in export earnings, data from the Export Promotion Bureau (EPB) show that Bangladesh's ready made garments sector saw a 3% growth in revenue in October compared to last year, a figure that surprises RMG owners.
According to the latest figures released by the EPB, after 13 months of much-needed recovery of the apparel export from the pandemic and promising growth, overall export earnings in October of the current financial year fell by 7.85% to $4.35 billion year-on-year from $4.72 billion in the same month of FY 2021-22.
Apparel export earnings, however, reached $3.67 billion, higher than the $3.65 billion registered in October of FY21-22.
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Apart from apparels, earnings fell for most other major sectors, including jute and jute goods, frozen and live fish and shrimp export.
Apparel exports – which constituted 83% of the country's total exports in the first four months of FY23 – spell the trend for the country's export growth. If the sector shines, so do the numbers.
But when The Business Standard spoke to at least 20 leading apparel exporters, all were taken aback by the data as they claimed every factory was running at 30% less capacity compared to the same month of last year.
Last Sunday, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan told a press briefing that garment exports may decrease by 20% in October.
Besides, based on data from the Customs, the BGMEA also said garment exports fell by 19% till 20 October compared to the same period of the previous fiscal year.
First Vice President of the Bangladesh Garment Manufacturers and Exporters Association Syed Nazrul Islam said, "I have no idea about export data in October so I cannot comment on it. As an exporter, my company [Well Group] is running at 30% less capacity compared to the same period of last year for the last two months, which may continue till next January".
He further explained that due to requests from buyers, he had held shipment of about 20% products.
"Now we are requesting buyers to receive those goods on condition of deferred payment as we have no free space to keep the inventory in our warehouse," he said, adding as the association leader he knew at least 500 exporters who had 10%-20% inventory.
Kutubuddin Ahmed, chairman of Envoy Textile, one of the largest spinning mills in the country, told The Business Standard that his factory's production in October was 50% of capacity and sales were also 50%.
Ahmed, also an exporter of readymade garments, said RMG growth was not supposed to be positive in October, but since EPB had provided the data, they could explain the figure better.
The EPB, however, said nothing was wrong with their data.
An EPB official, who was also involved in preparing the data, under anonymity, told TBS that their information was based on figures from the NBR.
He said there was no mistake from their side if the NBR data was accurate.
An official of NBR, under condition of anonymity, said the NBR stores all its trade data in the ASYCUDAWorld software. "We send the software information to the EPB. There should be no mistake."
Commerce Secretary Tapan Kanti Ghosh and EPB Vice Chairman AHM Ahsan could not be reached for comment.
Mohammad Hatem, managing director of MB Knit Fashions, a Narayanganj based knitwear factory, told TBS that exports have also fallen for his factory.
Shovon Islam, managing director at Sparrow group, one of the largest RMG exporters in Bangladesh, also told TBS that he exported 20%-25% less than regular exports in October.
Fazlee Shamim Ehsan, vice president of the Bangladesh Knitwear Manufacturers and Exporters Association, declined to make any comment on the EPB data.
He, however, said exports from his factory had fallen by 30% in October, adding that 100 others in his sector had experienced a decrease in exports compared to last month.
Rashed Mosharraf, executive director (Home) of Zaber & Zubair Fabrics Ltd, said due to the economic recession in the European Union, exports fell by 30% and the trend was expected to continue till next January as per buyers' prediction.
Asif Ashraf, managing director of Urmi Group and Rajiv Chowdhury, managing director at Young4Ever Textiles Limited, both, however, said there was a positive growth in exports in October.
Mahmud Hasan Khan Babu, managing director of Rising Group, said there was a negative growth compared to September, but could not confirm whether there was growth compared to the same period of the previous year.
According to the EPB data, Bangladesh's apparel exports in July-October of FY23 grew by 10.55% year-on-year to $13.95 billion, belying fears of negative growth expressed by industry leaders last month.
The country earned $12.62 billion from RMG exports from July-October last year.
Apparel exports posted a 7.5% negative growth in September this year compared to the same month last year, after a prolonged spell of growth for 13 months.
The decline is attributed to a reduced demand because of record inflation and economic slowdown in the sector's major destinations.
'Alarming, but expected'
The EPB data showed that exports earnings in July-October of FY23 increased by 7.01% to $16.85 billion from $15.75 billion in the same period of FY22.
Apparel exports in July-October of FY23 grew by 10.55% to $13.95 billion from $12.62 billion in the same period of FY22.
Earnings from woven garments export in the four months of FY23 increased by 15.08 % to $6.22 billion from $5.41 billion in the same period of the past fiscal year.
While for knitwear in the same period export earnings in July-October of FY23 increased by 7.14% to $7.72 billion from $7.21 billion in the same period of FY22.
Earnings from the home textile export in July-October of FY23 increased by 5.18% to $434.16 million from $412.78 million in the same period of FY22.
Export earnings from leather and leather goods also increased by 17.42%, but compared to same period last year, earnings from agriculture products fell by 23.81%, jute and jute goods fell by 1.96%, frozen and live fish fell by 23.78% and engineering products by 47.66%, the data showed.
Policy Research Institute of Bangladesh Executive Director Ahsan H Mansur said fall in export earnings and remittance simultaneously was alarming for the foreign currency reserve.
He said the foreign exchange reserve situation would not improve until export earnings and remittance inflow increased.
Mansur said it would take time until the end of winter to improve Bangladesh's exports.
Research and Policy Integration for Development Chairman Mohammad Abdur Razzaque said negative export earnings growth was expected in October due to the global economic slowdown.
It was not a big fall as the export earnings in October last year witnessed a big jump and posted all-time high export earnings, he said.
