Export earnings see 14% growth in August

Bangladesh's export earnings made a strong comeback with a little over 14% growth year-on-year in August this year following a more than 11% slump a month ago.

The country raked in $3.38 billion, riding on apparel shipments, especially knitwear products.  However, the export receipts are still 8.84% short of the monthly target of $3.71 billion, according to data from the Export Promotion Bureau (EPB).

In July and August combined, the earnings declined by 0.31% year-on-year, which was $6.87 billion in the same period last year and it remained 7.84% below the export target of $7.44 billion for the period, said the EPB.

The readymade garment sector recorded an 11.56% growth year-on-year last month with exports worth $2.75 billion, up from $2.46 billion last year. But the apparel sector's shipment slightly decreased by 1.27% year-on-year to $5.64 billion in July and August in 2021.

Except for jute and jute goods, all major sectors such as agriculture products, leather and leather products, home textiles, frozen and live fish, engineering products, pharmaceuticals, specialised textiles, plastic products have registered positive growth.

Mohiuddin Rubel, director at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said the growth in August was the result of shipments that had piled up due to factory closure on the occasion of Eid-ul-Adha in July.

Exports usually decline in the month of Eid and shipments are often pushed back to the next month. So, the July growth was negative 11.02%, and August made it up, he said.

"We are 6.16% behind the official target set for July and August," said Mohiuddin.

On the back of high yarn prices, knitwear items continue to do better with 17.19% growth, while woven garments saw 4.48% rise in exports in August, he added.

Dr Ahsan H Mansur, executive director at the Policy Research Institute of Bangladesh, said it is good news that almost all major sectors have experienced a good growth in August. This positive trend should continue.

"The overall growth of two months is negative because there was a different picture in July [for factory closure]. We should not take the month's negative growth into calculation," he also said.

The economist also hoped that export earners will perform better in the coming days as western countries have strongly recovered.    

Apparel exporters should focus more on maintaining compliance, setting up green factories and producing recycled products. In the coming days, brands will source more such products, he added.

Ahsan H Mansur said, "We have to diversify our export basket. We need to develop at least 5-6 sectors that will earn at least $5 billion each to reduce dependency on the RMG sector. We have a few sectors that have crossed the $1 billion mark in the last fiscal year.

BGMEA vice-president Shahidullah Azim said some backlogged stocks have been shipped in August as the country was under lockdown and Eid vacations in July.

He also mentioned that apparel shipments will increase next month as they have received at least 20% higher orders.

Bangladesh Tanners Association President Md Shaheen Ahmed said, "The leather sector did better in August as the European markets are making a good recovery."