Two major export items yet to rebound

While all major export-oriented sectors in the country have returned to a growth trajectory following an unprecedented business slowdown induced by the Covid-19 pandemic, two of the top 10 export items are still struggling to rebound.

Further, exports to three of the top 10 destinations – the United Kingdom, Spain and Japan – posted negative growth in the first quarter of the current fiscal year compared to the previous year.   

According to data provided by the Export Promotion Bureau, the two products which saw a decline in their exports in the July-September period are woven garments, leather and leather products.

Exporters attributed the poor performance of woven garments to the fact that the US market – a major destination of Bangladesh's woven apparel – has yet to recover from the pandemic's fallout. On the other hand, leather and leather goods, which were already losing access to the global market due to compliance issues, further lost their way amid the pandemic situation, they said.

Fazlul Haque, managing director of Plummy Fashions – the world's greenest knitwear factory – said, "Apparel products constitute a large portion of the country's exports to the UK. However, a significant number of the major brands that had cancelled orders during the pandemic are related to the UK market."

"Exports to Spain fell because of extended Covid-19 lockdowns in that country. On the other hand, Japan is a very sensitive nation. It adopted extra cautionary measures at the beginning of the novel coronavirus outbreak, which included reducing imports from Bangladesh," he added.

Fazlul Haque, also a former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), added that Bangladesh has been able to rebound in export earnings thanks to quick recovery in European countries – the largest market of Bangladesh's knitwear products.

He, however, said the market situation is still volatile as Europe is under threat of a second wave of Covid-19. 

Fazlee Shamim Ehsan, chief executive officer of Fatullah Apparels, said, "Shipments of many reinstated orders [which had been cancelled or withdrawn due to Covid-19] were made in the first quarter of the new fiscal year and most of those orders were of knitwear. This is why the figure of knitwear exports is so big."

"Generally, shipments of woven items – spring and summer season products – begin in September. However, they have been delayed because of the pandemic, resulting in lower exports of woven garments," he added.

Explaining the reasons behind declining market share of leather and leather products, Engineer Abu Taher, chairman Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association, said, "Exports in the sector have been on a falling trend because of compliance issues ever since the industry's relocation from Hazaribagh to the Savar Tannery Estate." 

"The authorities are to ensure compliance in the tannery estate as per the guidelines of the Leather Working Group. On the other hand, individual tanners are also struggling to comply with environmental guidelines due to financial problems," he continued. 

Mentioning that they have already invested around Tk7,000 crore, he said they need to invest more to ensure compliance.

He urged the government to announce a Tk6,000 crore stimulus package to salvage the sector. 

If the industry can come out of the existing crises, it will be able to earn $10 billion a year within a short time, he hoped.

Mahmudul Haq, chief executive officer of Janata Jute Mills Ltd, said the price of raw jute saw around Tk1,000 rise over the last one year. "This increase in the price of raw material has led to a rise in product prices. Additionally, there were a number of delayed shipments in the first quarter of this fiscal year. Because of all this the sector could see a rise in export earnings."

He hopes export earnings in the sector will rise further in the next quarter.