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

Apparel exports continued to dominate the country's export earnings, contributing $23.55 billion during the July-January period of the fiscal year 2024-25 (FY25), reflecting a 12% increase compared to the same period in FY24.

However, when comparing the ready-made garment (RMG) export figures for July-January of FY25 with those of the same period in FY23, the growth over the two-year period was only 1.38%.

Exports exceeded $4 billion in earnings for four consecutive months (October-January). In January FY2024-25 alone, the single-month export value reached $4.44 billion, registering 5.70% growth compared to $4.20 billion in January FY2023-24, according to the latest Export Promotion Bureau (EPB) data released on Monday.

The state agency provided this data, reflecting real-time shipment updates via the Asycuda World system from the National Board of Revenue (NBR).

Cumulative export earnings for the July-January period of FY2024-25 recorded an impressive 11.68% growth compared to the same period in the previous fiscal year.

However, after experiencing consecutive double-digit growth over the previous four months (September-December), the apparel sector's earnings growth slowed to 5.70% in January FY2024-25. 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. Further analysis is required to identify the specific factors influencing this trend, such as market-specific performance, product and market concentration, and other variables," said Mohiuddin Rubel, a Former Director of BGMEA and Additional Managing Director of Denim Expert Ltd.

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. 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 of FY25.

Home textiles posted positive growth, increasing by 6.22% to $493.86 million in the July-January period of FY25, compared to $464.93 million in the same period of the previous fiscal year.

Export earnings from agricultural products in the first seven months of FY25 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 of FY25, 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 of FY25, export receipts from jute and jute goods experienced a decline of 8.35%, totalling $484.31 million, down from $528.44 million in the same period of FY24, EPB data revealed.

The export target for FY2024-25 has been set at $50 billion, representing a projected growth of 12.44% compared to the last fiscal 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 The Business Standard, 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."

"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, Abdullah Hil 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 situation has still not normalised, which is crucial for regaining buyers' confidence.