Bangladesh's apparel export has surpassed the $30.76 billion target set by the Export Promotion Bureau (EPB) for the immediate past FY21, say sources at the garment exporters association.
In the fiscal 2020-2021, the country exported apparel items amounting to $30.86 billion – which is 10% higher than in the previous year.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) came up with the calculation based on the National Board of Revenue (NBR) data. But the EPB is yet to make the official announcement.
With the export volume cruising nicely even amid the Covid-19 pandemic, the readymade garment (RMG) manufacturers expect better business performances in the upcoming months.
Mass vaccination in the US and Europe – two major destinations of Bangladesh's apparel exports – has helped western orders get back on track.
However, they are worried about hikes in raw materials and freight charges, plus the price drop of RMG items in the international market.
"We are getting more export orders that shifted from India, Myanmar and China," said Md Shahidullah Azim, vice-president of the BGMEA.
"Besides, the enviable progress we have achieved in improving the factory environment in the last couple of years is increasing the confidence of the buyers in doing business with Bangladesh. After an eight-year pause, now companies like Walt Disney are coming back to Bangladesh to source apparel items," he added.
Shahidullah Azim, the owner of the country's one of the largest woven exporters Classic Group, expressed concern over the continuous fall in apparel prices despite the increase in the export.
He also expressed concern over whether the new buyers coming to Bangladesh could be retained as the country could not make the desired progress in the ease of doing business.
RMG exports started plummeting drastically since the Covid-19 outbreak in Bangladesh in March last year. The garment sector contributes about 84% to Bangladesh's overall exports.
Against a $38.20 billion target, apparel export in the 2019-20 fiscal year declined to $27.95 billion – that is 18% less than the year.
In the immediate past 2020-21 fiscal year, the export grew by 10% to $30.86 billion. As per the BGMEA, the annual growth rate, however, is around 16%.
The BGMEA hopes the export volume in the 2021-22 fiscal year might be $33.70 billion as the Association President Faruque Hassan recently told The Business Standard that the export might cross the pre-pandemic 2018-19 volume.
Bangladesh Knitwear Manufacturer and Exporters Association (BKMEA) Vice-President Fazlee Shamim Ehsan also said the export growth in the fiscal 2021-22 fiscal might be higher than what it was in the pre-pandemic time.
"If the virus situation does not deteriorate, the knitwear export in this year will clock a 15% growth," he told TBS. "But a 150% hike in freight costs and 15% in raw materials will eat into the overall export earnings despite the growth."
Dr Ahsan H Mansur, economist and executive director of the Policy Research Institute (PRI), the export performances are positive, but still below the pre-pandemic time.
"It is still at the recovery stage," he said. "Apparel exports may further rise in upcoming months. Despite the spiral, it is disappointing compared to the factory owners' $50 billion target by 2021."
After the Rana Plaza apparel factory collapse in 2013, the BGMEA set the $50 billion export target by 2021.
Ahsan H Mansur said, "Even if Bangladesh's exports increase by making typical garments, the entrepreneurs will not get their desired prices."
He said, "We have to switch from cotton-based products to man-made fibre. To create a strong position in the international market, we have to go for high-value products."
Bangladesh's cotton-based apparel items still account for over 70% of the export though man-made fibre accounts for more than 70% of the global market.
BGMEA Vice-President Shahidullah Azim thinks the shift to man-made fibre would increase the value addition by 20-25% compared to the current cotton-made fibre items.