Apparel sector is strongly driving the export of Bangladesh as export in May, 2019 achieved highest ever earnings in a single month with $3.81 billion. The earning posted 14.78 percent year-on-year growth and also beat the monthly target by 9.23 percent.
The previous single month highest export was recorded at $3.67 billion in January this year. Overall export earnings reached to $37.76 billion between July and May, which is 11.92 percent higher than the same period of last fiscal year, according to Export Promotion Bureau.
Between July and May, the export of garment, which makes up more than 80 percent in the total exports earnings, grew 12.82 percent year-on-year to $31.73 billion. Some $15.69 billion came from knitwear export and $16.06 billion from woven export. The garment export was 6.95 percent higher than the 11-month target of $29.67 billion set by the government.
US China trade war is apparently produce the boon for the apparel sector as US retailers and brands are flocking to Bangladesh because they want hassle-free shipment and do not want any uncertainty. Hence, industry insiders claiming that work orders are also shifting from China and other countries to Bangladesh as the sector in the world’s second largest economy faces higher cost of production, uncertainty and a lack of skilled workers. The massive transformation in the Bangladesh’s garment sector since the collapse of the Rana Plaza has also made the country an attractive destination to place orders.
The buyers’ confidence in the country has improved significantly owing to the inspection and remediation of garment factories by the Accord and the Alliance, the two western brands’ platforms set up to improve the workplace safety in the sector.
Among other major sectors, agricultural products posted a sharp rise of 40.3% growth to $854.46 million in the first eleven months of FY2018-19 from $609 million in the previous fiscal year.
Pharmaceuticals sector also rose by 28.14% to $123 million, up from $96 million, and plastic goods by 25.27% to $113 million, up from $90 million during the July-May period of FY2018-19.
The shipment of frozen and live fish such as shrimp and crabs rose 1.87 percent to $474.02 million and that of agricultural products such as tea, vegetables, fruits, spices, dry food, and tobacco surged 40.3 percent to $854.46 million. Cement, salt and ores, petroleum byproducts, ceramics, handicrafts, cotton, cotton products (yarn and wastes of fabrics), carpet, terry towel, footwear, wigs, and furniture performed better in the 11-month period.
However, leather and leather goods and jute and jute goods continued their poor show. Leather and leather goods fetched $943.83 million, down 5.53 percent year-on-year.
This is largely because many tanneries that have shifted to the leather estate in Savar have not started full production yet.
The sector is the only segment that had crossed the $1-billion export mark after the garment sector and it still has the opportunity to repeat the success at the end of the fiscal year. Exports of jute and jute goods, another important foreign currency earner, fell 19.99 percent year-on-year to $773.57 million.
The sector’s earnings are declining mainly because of higher use of jute goods like sacks in the domestic market and the anti-dumping duty slapped on it by India.
Earnings from home textile export in July-May of FY19 fell by 2.69 per cent to $800.85 million from $800 million in the same period of the previous fiscal year.
Home textiles, building materials, ships and bicycles also performed poorly.