Bangladesh's exports plummeted over 4% in October this year compared to the corresponding period a year ago, as all major export-oriented sectors but jute saw their earnings decline in the month.
According to the latest data released by the Export Promotion Bureau, the country received $2.95 billion in export earnings last month, which was $3.07 billion in the same month of the previous year. The October export earnings were around 6% less compared to the government's target set for the month.
The top foreign exchange earner – readymade garment (RMG) – witnessed a 7.8% year-on-year drop in exports in October. Among the other major export sectors, leather and agriculture saw their exports fall by over 7% and 8% respectively.
Amid this somewhat gloomy situation, the jute sector emerged as an outstanding performer by posting a whopping 40% year-on-year increase in export earnings in October. Frozen and live fish, pharmaceuticals, plastic products and non-leather footwear are some notable sectors that did well last month.
Nonetheless, the overall export earnings of $12.84 billion in the first four months of the ongoing FY21 was still 0.97% higher compared to $12.72 billion earned in the same period last year.
Exporters fear that their business may suffer a greater shock in the coming months as the Covid-19 infection has already marked a second wave in major export destinations, particularly the European Union.
Fazlul Haque, managing director of Plummy Fashions – the world's greenest knitwear factory, said the apparel industry is currently passing through hard times but the 7.8% drop in export earnings in October is not a big fall considering the pandemic situation.
"We had good exports in the first three months of this fiscal year, thanks to the reinstatement of a good number of cancelled and held-up orders and shipment of some orders made targeting the forthcoming Christmas," said Fazlul Haque, a former president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
He expressed fear that exporters might be facing a challenging time in coming days as the second wave of Covid-19 has already affected the EU badly.
Echoing him, MA Jabbar, managing director of DBL Group, said apparel exports might not be good in November and December as buyers are having a cautious look at the overall situation.
Shaheen Ahmed, president of Bangladesh Tanners Association, said leather goods are always treated as luxury items and people are now avoiding such items due to the pandemic.
He fears that exports of leather items might fall further in the coming days in the wake of the Covid second wave in various parts of the world.
Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, considers the fall in RMG exports as a reflection of the present market situation. He identified a low demand for apparels and their reduced price as the reasons behind the recent dip in RMG exports.
"Apparel exporters have long been alleging that buyers are offering low prices, but the prices they are offering during the ongoing pandemic are even lower," he said.
The economist, however, said the increase in exports of jute and jute goods is a real good news amid these trying times.
Dr Mustafizur Rahman, distinguished fellow at the CPD, sees the poor performance of the RMG sector as an effect of the second wave in the European Union.
He termed this falling trend after a positive growth in the first quarter of the current fiscal year a bad omen for the sector and asked for getting prepared to face a greater crisis in the coming days.
As part of this preparation, Bangladesh should make efforts to boost exports to the regional markets. He also emphasised the need for diversifying products, especially those manufactured using manmade fibres, to take advantage of the rising demand for such products globally.
Stressing the importance of competiveness, he said if the country loses its competitive edge, it may face greater shocks in export earnings in the future.
Remittance growth slows
The growth in remittance inflows, which remained upward even amid the Covid-19 pandemic, slowed down in October, reflecting the consequences of a fall in Bangladesh's labour exports amid a global economic crisis.
In October, the year-on-year remittance growth dropped to 28.62% from 45.64% in September, according to the Bangladesh Bank's data.
The total receipt of remittance was $2.11 billion in October, down by nearly 2% from the previous month.