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Export earnings in February edged down 1.80 per cent year-on-year to $3.32 billion mainly because of a slowdown in apparel shipment, according to data from the Export Promotion Bureau (EPB).
The February earning is also 10.74 per cent short of the $3.72 billion target set for the month, while overall exports in July-February, the first eight months of the current fiscal year, fell 4.79 per cent to $26.24 billion.
The July-February receipt is also 12.72 per cent less than the periodic target of $30.06 billion.
Exports await a further blow amid the coronavirus outbreak in China, the major source of raw materials for Bangladesh’s apparel items, said exporters and economists.
The coronavirus will badly impact the economy as exports from the country are likely to be affected, said Ahsan H Mansur, executive director of the Policy Research Institute.
“We have to agree that China is an integral part of the global supply chain. We will also lose due to the outbreak,” he said.
Bangladeshi exporters are going through a rough patch in recent months because of factors like poor labour efficiency, high cost of production, low price of garment items and a strong local currency against the US dollar.
The level of efficiency of garment workers is higher in the peer countries such as China, Vietnam and Turkey, Mansur said, adding that Bangladeshi manufacturers are meeting their matches in the global markets with poor productivity.
The local currency can be devalued as a stopgap measure as Bangladesh’s competitors like India, China and Vietnam have already done so and are reaping benefits.
In July-February, garment shipment declined 5.53 per cent year-on-year to $21.84 billion, which is also 13.45 per cent less than the target of $25.24 billion set for the period.
Of the earnings, some $10.89 billion came from knitwear export and $10.94 billion from woven garment, according to the EPB data.
However, both knitwear and woven exports declined 5.17 per cent and 5.88 per cent respectively in the July-February period when the overall growth in apparel shipment stood at 5.53 per cent negative.
“It’s definitely not a good sign for the economy as export continues to plummet for the third consecutive month and six out of the eight months of this fiscal year reported negative growth which is extraordinarily alarming,” said Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association.
“The challenges and weaknesses still remain,” she said.
The sector has apparently lost its competitive edge because of a decline in prices, mandatory annual increment of wages and the strong local currency against the dollar, Huq said.
“On top of it, price of electricity has gone up 4.9 per cent recently. The coronavirus outbreak is also predicted to have a certain impact on the industry,” she said.
The global retail market is also not faring well: The US clothing retail sales in January went down 3.1 per cent which is the worst in the last 10 years. Shopping malls in a few big cities have already started feeling the pinch.
“And we are yet to see what impact do Brexit and EU-Vietnam FTA leave on the sourcing dynamics,” Huq said.
“Therefore, the time is extremely challenging for now. And there is no better time than now to support the sector.”
Meanwhile, among the other sectors, frozen and live fish exports declined 4.39 per cent to $376.73 million, while leather and leather goods 9.04 per cent to $631.89 million in July-February.
However, exports of jute and jute goods edged up 24.45 per cent to $697.63 million during the period.
(TDS)
