Published in New Age on Tuesday, 14 October 2014.
Slow US market dents export earnings in Q1
Staff Correspondent
Export earnings in the first quarter of the current financial year fell by 3.87 per cent to US$ 7.69 billion from the government-set target of US$ 8 billion as exports to the US market is suffering heavily.
The export earnings in the July-September period of FY15 registered a poor earning growth of 0.88 per cent while the growth in the same period of the FY14 was 21.24 per cent.
The single month export earnings witnessed a negative growth for the second time in September, third month of the financial year 2014-15, according to the Export Promotion Bureau data released on Monday.
The export earnings in September fell by 1.44 per cent to US$ 2.55 billion from US$ 2.59 billion of the financial year 2013-14.
The single month earnings growth was 36.26 per cent in the first quarter of the FY14, the EPB data showed.
Experts and exporters said that the export earnings growth witnessed a drastic fall due to slowdown in the US market. The export earnings from the US are declining continuously for last couple of months as good number of buyers shifted their order to alternative sources, they said.
‘There are three reasons for declining export earnings: firstly economic slowdown in the US and Germany, secondly the compliance issue in the readymade
Continued on garments and third is appreciation of currency against US dollar,’ Khondoker Golam Moazzem, additional research director at the Centre for Policy Dialogue told New Age on Monday.
He said that the US and the Germany are the major export destinations of Bangladesh’s readymade garment but recently the export demand of the countries fell due to their internal economic slowdown.
At the same time some buyers form US and EU have shifted their orders from the factories housed in the shared buildings due to safety concern, Moazzem said.
‘It is true that some buyers are shaky to provide order to Bangladesh as the restructuring of the readymade garment sector remained in an interim phase,’ he said.
Moazzem said that some competitive countries are taking advantages of the currency appreciation of Bangladesh and increasing their export growth from the US market.
The EPB data showed that the export earnings from readymade garments in the first quarter of the FY15 grew by only 0.48 per cent to US$ 6.23 billion against US$ 6.20 billion in the same period of the last financial year.
The export earnings from woven in July-September fell by 2.66 per cent to US$ 2.96 billion against US$ 3.04 billion in the same period of the last financial year while the knitwear export amounted to US$ 3.27 billion with a 3.49 per cent growth against US$ 3.16 billion in the same period of the financial year 2013-14.
Md Shahidullah Azim, vice president of Bangladesh Garment Manufacturers and Exporters Association, said that the back to back industrial incidents, political instability and ongoing safety inspection in the RMG sector were taking heavy toll on the export earnings growth.
Azim said that buyers, who shifted order following the Tazreen Fashions fire and Rana Plaza tragedy, have started to come back as Bangladesh’s garment sector has made a significant progress in terms of work place safety and workers rights.
‘But some US buyers are till now shaky to place order in Bangladesh and there might have been political reason as the US suspended trade facilities for Bangladesh for the working condition of RMG sector whereas the sector was not entitled for the GSP facilities in the US market,’ he added.
A recent statistic of the US Department of Commerce showed that the export to the US market from Bangladesh in the January-August period of 2014 fell by 1.13 per cent to US$ 3.56 billion against US$ 3.60 billion in the same period of 2013.
The export earnings from readymade garments in the period fell by 1.51 per cent to US$ 3.43 billion against US$ 3.48 billion in the same period of 2013, the US data showed.
According to the EPB data, Frozen foods export in the first quarter of current financial year fell by 0.25 per cent to US$ 190.80 million from US$ 191.28 million in the same period in FY14.
Leather and leather products export grew by 12.39 per cent to US$ 308.83 million in the first three months of the FY15 from US$ 274.79 million in the same period of the FY14.
Home textile export grew by 3.14 per cent to US$ 184.91 million in the July-September period of the FY15 from US$ 179.28 million in the same period of the FY14.
The export of jute and jute products fell by 3.94per cent to US$ 197.42 million in July-September of the FY15 from US$ 205.52 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 US$ 83.48 million with a 22.19-per cent negative growth.