Apparel, agricultural products accelerate the pace
Bangladesh’s export earnings posted a robust growth during the first half of the current fiscal year(FY) 2018-19, rising by 14.42% to $20.50 billion during the period, riding mostly on apparel and agricultural products.
Political stability, government’s economic support measures, and the US-China tariff war that forced global brands to change their sourcing destination to Bangladesh, are some of the reasons for the leap in outbound shipments, economists and industrialists said.
Apparel items alone earned $17.08 billion, counting for 83.34% of total earnings. The sector made a growth of 15.65% during the period from July to December, according to data of Export Promotion Bureau (EPB).
Among other sectors, agricultural products have been steadily making the stride in export business, as the sector with the lionshare of its value being added locally has posted a 66.80% growth to $517.64 million.
The export figure of $20.50 billion is 9.13% higher than the target of $18.78 billion set for the half of the 2018-19 fiscal year, the EPB data said.
In December 2018, Bangladesh’s export earnings rose by 2.1% to 3.42 billion, which was $3.35 billion in December last year.
Industry people and trade experts opined that the export performance showed a stable and sound growth due to political stability, continuation of government policy support,and safety improvement in the apparel sector.
They said tariff tensions between the USA and China have expedited the growth as buyers chose Bangladesh as an alternative to China.
“Global apparel buyers are looking for a safe sourcing destination due to the tension centring the US-China tariff war. They chose Bangladesh as an alternative option,” Abdur Razzaque, a director of Policy Research Institute (PRI), told the Dhaka Tribune.
“A solid US economy and rise in their employment rate also created demands for Bangladeshi clothing products.”
“On top of that, there has been a stable political situation in the country and policy consistency, which helped to deliver export orders timely,” added Razzaque.
Apparel exports show better growth
The ready-made garments(RMG) sector was in the driving seat during the period to lead the export earnings high as the sector contributed $17.08 billion to the total export earnings.
As per EPB data, during July-December, Bangladesh earned $17.08 billion, up by 15.65%, which was $14.72 billion in the same period of the last fiscal year.
Knitwear exports went up 13.92% to $8.65 billion in the given period, which was $7.60 billion in the same period the previous year, while shipment of woven garments rose by 17.48% to $8.43 billion over the same period.
“China, the largest exporter of clothing products, is shifting focus to higher end products and moving towards tech-based production. The gradual shift in business strategy by the Chinese manufacturers has created an opportunity for Bangladesh,” former BGMEA vice president Shahidullah Azim told the Dhaka Tribune.
Azim, also the managing director of Classic Group, said global buyers have placed more work orders due to rise in tariffs on Chinese goods by the US government, which helped Bangladesh to push up its export earnings.
Besides, Bangladeshi apparel makers have spent huge amounts of money for years to improve safety standards in their apparel factories, said Azim.
‘Modern and compliant factories remain an attraction for global brands,” he added.
Economists attributed the surge in export earnings largely to the US-China trade war.
In the beginning of the year, export performance was slow, but it rose sharply in the second half of the year. Global buyers have changed their sourcing destination, which pushed Bangladesh’s export earnings up, Centre for Policy Dialogue (CPD) Research Director Khondaker Golam Moazzem told the Dhaka Tribune.
“One of the important side of the growth perspective remains the growth in non-RMG export sectors. It is a good sign for the country to diversify its export basket and reduce dependence on the apparel sector ,” said the economist.
In the first half of FY18-19, the non-RMG export earnings registered an 8.64% growth to $3.41 billion, which was $3.14 billion in the same period last year.
Export performance of other major sectors
Among other major sectors, agricultural products have posted a sharp rise, making a 66.80% growth to $517.64 million in the first six months of the current fiscal year.
In addition, export earnings from the pharmaceuticals sector rose by 38.42% to $70 million, and plastic goods by 21.25% to $56.54 million.
Specialized textile sector saw a 49.53% growth to $72.3 million, while home textile products rose 0.3% to $405 million.
However, earnings from leather and leather goods witnessed a 7.15% negative growth to $532.3 million during the period, which was $620.27 million last fiscal year.
Jute and jute goods, the third largest export earning sector, registered a 6.66% negative growth to $421 million.
Exports of frozen and live fish returned to positive territory and earned $314.73 million during July to December, which was $312.46 million over the same period the previous year.