July export earnings unaffected by pandemic
- July earnings 13.39% higher than strategic target
- Jute, pharma, frozen fish, agriculture showed positive trend
- Knitwear, mostly exported to EU, posted good growth
- Woven item exports declined
- Large part of RMG orders suspended in April, May restored in July
Showing a positive trend after a six-month struggle, Bangladesh's export earnings in July of this fiscal year was 13.39 percent higher than the strategic target set for that month.
The country fetched $3.91 billion in July, showing 0.59 percent growth compared to the corresponding month of the previous fiscal year, according to the Export Promotion Bureau.
Export earnings were $3.88 billion in July of fiscal year 2019-20.
Exporters and economists welcomed the growth but also expressed concern over whether the performance would continue as the global market has not yet recovered from the Covid-19 pandemic.
The country's export earnings experienced a big drop in the last quarter of the previous fiscal year due to the novel coronavirus pandemic.
However, export performance displayed a positive trend during only two months – July and December – of the last fiscal year.
"The positive trend in export is back after a few months. It is positive news for the country but we should remember that a recession has begun," said Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue.
"We welcome this performance, but there is no guarantee that it will continue for long," he added.
"Performance sustainability will depend on apparel exports as our export performance is mainly RMG-driven. That is why we should think about what will happen in next autumn and winter," continued the eminent economist.
Mustafizur suggested devaluing the local currency against the US dollar as "it will help exporters become more competitive against their competitors like: Vietnam, India, Pakistan, and China."
"We should cash in on the opportunities for jute, pharmaceuticals and non-leather footwear. These items have already shown a good response in the first month of the current fiscal year," he added.
Export performance in July showed excellent growth with a fantastic figure, said Md Fazlul Hoque, managing director of Plummy Fashions Ltd, the greenest knitwear factory in the world.
He thinks there are three reasons behind this growth, "A big part of the orders that were suspended in April and May were restored in July. Secondly, exporters got some orders as the government had allowed factories to resume operations in April. Finally, some brands did not cancel their orders for July."
Fazlul said this growth may not continue in August and September but it will be good if the apparel sector can export about $2.5 billion worth of products in those months.
He explained that knitwear products have enjoyed good growth as they are mainly exported to the European Union and that market is already on its way to recovery.
"However, woven items are mostly exported to the US, which is still struggling to tackle the pandemic," he added.
The apparel sector, Bangladesh's major export earner, crossed the strategic target for July with 14.18 percent growth but experienced 1.98 percent negative growth compared to the corresponding month of the previous fiscal year.
According to the EPB data, RMG earned $3,244.94 million in July 2020, down from $3,310.48 million in the same month of the previous year. Of this, knitwear items fetched $1,750.28 million – which was $1,678.16 million in July in the previous fiscal year.
However, woven item exports declined by 8.43 percent to $1.49 billion in July of this fiscal year – which was $1.67 billion in the same month of the previous financial year.
Bangladesh Garment Manufacturers and Exporters Association President Dr Rubana Huq declined to comment, saying she is on leave.
Meanwhile, in July of this fiscal year, jute, once known as the golden fibre of the country, and jute goods, fetched $103.51 million – which was $74.88 million in the same month of the last financial year.
Frozen and live fish exports also increased by 2.21 percent to $42.52 million – which was $41.6 million in July of the previous fiscal year.
The pharmaceutical sector enjoyed 49.08 percent growth to $17.01 million – up from $11.41 million in July of the last financial year.
Exports of leather and leather products fell by 15.23 percent to $89.94 million – which was $106.1 million in July of fiscal year 2019-20.