Published in The Financial Express on Thursday, 4 June 2015.
Govt to fix export target at $ 33.65b for next FY
The government is set to fix the country’s export target at US$ 33.65 billion for the upcoming fiscal year (FY) projecting a single-digit growth for the first time in many years, a high official at the ministry of commerce (MoC) said.
Poor export orders, weaker exchange rate of taka against different foreign currencies including US Dollar and Euro and price fall of yearn and fabrics in the international market were under consideration while fixing the target, he added.
The Export Promotion Bureau (EPB) under the MoC has projected the target for the FY 2015-16 which sees a 7.49 per cent or 2.35 billion rise over the estimated achievement of the current FY.
EPB data showed that the projected growth in annual export target was 9.98 per cent in the FY 2014-15, 12.85 per cent in 2013-14, 15.22 per cent in FY 2012-13, 15.58 per cent in FY 2011-12 and 14.16 per cent in FY 2010-11.
“Many factors like poor orders of garment export and fall in demand of local shrimp in the international market and price fall of yearn and fabrics in the international market have played a vital role behind projection of poor export growth for the next fiscal,” Vice Chairman of EPB Subhasish Bose told the FE Monday.
“A recession like situation still persists in Europe and Russia for which achievement of the current fiscal (during July-April) is poor. So how we can expect a better performance in the next FY?” he posed a question.
“Poor performance of the current FY was also considered while fixing the target.”
According to EPB data, the country has achieved only 2.63 pr cent growth during the July-April period of the current FY and projected a 3.70 per cent growth at the end of the year against target of 9.98 per cent.
However, industry insiders and experts expressed their mixed reaction over the projection of new target.
Some of them said the target is not achievable as most of the garment factories are yet to upgrade working conditions of their factories according to the demand of Accord and Alliance while others expressed their hope of exceeding the target due to better political environment, regaining of exchange rate and initiatives taken by the government for product and market diversification.
“Most of the garment factories are still lagging far behind meeting the conditions fixed by the Accord and Alliance for which we are in fear of further fall in orders in the coming years rather than a growth,” president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Md Atiqul Islam told the FE on Monday.
President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) A K M Salim Osman expressed his hope of exceeding the target mainly because of better political condition.
“Volatile political condition brought down our export growth in the running fiscal. If the present situation continues, we are hopeful of achieving double digit growth in the next FY,” he added.
However, executive director of Centre for Policy Dialogue (CPD) Mustafizur Rahman said considering global slowdown, and poor exchange rate, the projected target is justified.
“Vietnam is emerging as our competitor in US market and Cambodia and some other developing countries also emerged as competitors for the local exporters in the European market. So considering all these, the single-digit target is justified,” he said.
“To maintain the single-digit export growth, we have to pay attention to both the products and market diversification and to emphasise the need for boosting growth in regional markets,” he added.
However, for the upcoming fiscal, the growth in export of knitwear products has been projected at 6.5 per cent, woven garments at 7.46 per cent, jute and jute goods at 9.08 per cent, leather products at 9.77 per cent, frozen food at 5.0 per cent, specialised textiles 10.63 per cent and chemical products 7.54 per cent.
Export of leather and leather goods during the period totalled $ 1,130.66 million, with a growth of 0.59 per cent, while the exports of other major commodities that witnessed growth were jute and jute goods $ 896 million, agricultural products $ 620.25 million, handicrafts $ 8.88 million and paper and paper products $ 37.26 million.