The country’s export earnings in the first four months of the current financial year 2014-15 registered a negative growth for the first time in last five years due to sluggish earnings from the major export item, readymade garments.
The monthly export growth in October also fell for the second consecutive month due mainly to the slowing garment export earnings from major destination, the USA, said exporters.
The export earnings in the July-October period of the FY15 fell by 0.97 per cent to $9.65 billion from $9,747.17 billion of the FY14, according to the Export Promotion Bureau data released on Monday. The export earnings growth in July-October in the FY14 was 16.47 per cent year-on-year.
The single month export earnings in October fell by 7.63 per cent to $1.95 billion from $2.11 billion of the same period of the FY14.
Experts and exporters think that the trend of sluggish export earnings growth was a worrying signal but it would be possible to recover the shortfall in coming months.
‘This is an affect of the ongoing restructuring of the country’s readymade garment sector as the Western buyers are not placing orders with the factories housed in shared buildings,’ Mustafizur Rahman, executive director of the Centre for Policy Dialogue, told New Age on Monday.
‘Obviously, it’s a worrying signal for Bangladesh at it is lagging behind its competitor countries like Vietnam, Cambodia and India,’ he said.
Mustafiz thinks that there is a scope of readjustment of the earnings growth in the coming months through ensuring concrete restructuring in the garment sector.
The export of readymade garments fell by 1.76 per cent to $7.75 billion in July-October of the FYT15 from $7.88 billion in the same period of the FY14.
Nazneen Ahmed, senior research fellow of Bangladesh Institute of Development Studies, said, ‘The trend of export earnings growth is a signal that something is wrong and we need to be cautious.’
Both the internal and international causes are responsible for the negative export earnings growth, she said.
‘The government will have to take initiative to rebuild the image of the country abroad and at the same time compliance will have to be ensured in the readymade garment sector,’ Nazneen said.
Due to the industrial accidents and political turmoil the sector witnessed a sluggish export order in last year and the impact is being appeared in the current year, she said.
‘I think the problems are temporary as the garment sector in Bangladesh is going through a transition period due to the compliance issue,’ Nazneen said.
The export earnings from woven garments in July-October of the FY15 fell by 4.40 per cent to $ 3.69 billion against $3.86 billion in the same period of the FY14 while the knitwear export amounted to $4.05 billion with a 0.90 per cent growth against $4.02 billion in the same period of the FY14.
Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said, ‘This is the impact of the two major industrial incidents in the readymade garment sector as buyers shifted their orders from shared buildings due to safety concern.’
After the safety assessment in the garment factories the buyers have started to come back as only 2 per cent of the factories have been found risky, he said.
Azim hoped that the export earnings in the second half of the financial year would be registered a positive growth as the orders had started to increase.
Leather and leather products export grew by 6.10 per cent to $439.58 million in the first four months of the FY15 from $383.63 million in the same period of the FY14.
Home textile export fell by 1.14 per cent to $ 235.69 million in the July-October period of the FY15 from $238.41 million in the same period of the FY14.
The export of jute and jute products fell by 2.39 per cent to $ 260.70 million in July-October of the FY15 from $267.07 million in the same period of the FY14.
The export earnings from engineering products including iron steel, copper wire, stainless steel ware, engineering equipment, electric products and bicycle amounted to $138.38 million with a 7.31 per cent negative growth.
Source: Newage
