Exports see 23% growth in May

Bangladesh recorded export amounting to $3.83 billion in May this year, according to data released by the Export Promotion Bureau (EPB) on Thursday (02 June).

The export receipts couldn't surpass the $3.89 billion target set for the month. However, the export has been 23.24% high than the $3.10 billion of May last year.

Earnings in May fell compared to April when the country's export earnings crossed $4.73 billion. Export was above $4 billion per month for the last eight months, before falling from the mark in May this year. 

Apparel shipment stumbled to $3.15 billion in May, which was the lowest earning in the last nine months, according to the EPB data.

Talking with The Business Standard, Fazlul Hoque, managing director of Plummy Fashions Ltd, one of the greenest knitwear manufacturers in the world said "due to Eid vacation apparel shipments were a little bit lower in May, as it was a small month to do business".

He also mentioned that the export volume still remains good compared with last year. But it might fall in the coming months as the order placement is going slow. He further explained that now the industry is coming back to the natural situation after enjoying overflow of orders due to the pandemic Covid 19.

Eng Kutubuddin Ahmed, chairman of Envoy Textile Ltd, world's first LEED platinum certified denim textile said the apparel export might face some cancellations and deferred shipment in the coming days as stores are facing a decline in sales.

"We had the pressure of orders after Covid-19 recovery in our export markets as almost every store was empty. When they refill stores with new goods, Russia- Ukraine war changed everything".

Now inflation rate is higher even in Europe and USA, food price hike is almost 40%, he said adding that people have to cut some expenses that might affect the apparel sector.

Citing his company experience, Eng Kutubuddin Ahmed said, "We are observing that the number of order placement is decreasing. Some buyers are asking for about a two-week deferred shipment."

He went on to say, "A buyer has already asked for a 2.5% discount. The situation will worsen in coming days if the war is not stopped immediately."

The country's exporters posted 34.09% year-on-year growth in export earnings to $47.17 billion in the July-May period of the current fiscal year of 2021-22.

In April, the exports clocked the $4 billion mark with 51% year-on-year growth, raking in $43.34 billion in 10 months of the current fiscal year.

Due to the huge trade deficit in the current financial year, Bangladesh has also plunged into a large deficit in the current account balance of foreign transactions.

The country's trade deficit is growing sharply owing to a massive increase in imports compared to exports and the rise in prices of all kinds of products such as food items and fuels in the world market.

In the first nine months of fiscal 2021-2022, the trade deficit was about $25 billion which was 9.25% higher than that of the full period of the previous fiscal year. The deficit is around 64% more than the July-March period.

The trade deficit for the nine months of fiscal 2020-21 was $15.28 billion while it stood at $22.80 billion for the entire fiscal year.

RMG sector sees 34.87% export growth

During the July-May period of 21-22, the overall RMG export grew by 34.87% to $38.52 billion which was $28.57 billion in July-May, FY 2020-21. 

The  export of knitwear was $20.99 billion, while woven garments was $17.53 billion.  

BGMEA director Mohiuddin Rubel said "If we look at the exports of single month May, the RMG export was $3.15 billion dollar with 23.53% growth compared to May 2021. The growth in May is less than compared to the previous months. Although the overall export growth is showing a continuous positive growth trend which is really inspiring, there are certain challenges we are facing currently due to ongoing Russia-Ukraine conflict, increased raw material prices and the prevailing energy situation.

Moreover, Mohiuddin said, after the lockdown people used to shop more which is one of the reasons behind this unusual growth in previous months. 
But currently that scenario has started to come to the normal level.
Also, due to increase in the price of materials, countries are facing inflation problems.

"What we foresee is that order volume is not like how we have seen in previous few months, growth is slowing down, May export data already shows the decline in growth. We need to work on how we can retain the growth pace in the longer term," said the BGMEA director.

He also mentioned that despite the price being slightly better, it does not go with the increased cost of production. We need to focus more on improving efficiency (both process efficiency and workers efficiency), modernise our factories and develop skills.