The export receipts reached $5.10 billion in March, marking a 9.88% year-on-year increase, according to data published by the Export Promotion Bureau (EPB) on Tuesday. However, the earnings were slightly lower than the $5.19 billion recorded in February. Industry insiders foresee that this boost will fortify the country's foreign exchange reserves and contribute to mitigating volatility in the dollar market.
According to data from the Bangladesh Bank, gross reserves stood at $19.45 billion as per BPM-6 on 27 March. In March, inward remittances stood at around $1.99 billion, marking the end of an upswing observed in the previous two months when the figure remained above the $2 billion mark.
EPB data show apparel exports grew by about 11% to reach $4.34 billion in March, a significant increase from $3.89 billion a year ago. Of the amount, knitwear exports saw 16.47% growth, reaching $2.42 billion compared to $2.07 billion in the corresponding month last year, while woven apparel shipment increased by about 6.26% to hit $1.93 billion, up from $1.81 billion. EPB data say overall export earnings rose by over 4.39% to $43.55 billion in the first nine months of this fiscal year, compared to $41.72 billion in the corresponding period a year ago. For apparel exports, the growth was over 5.53% to $37.20 billion in the first nine months of this fiscal year, compared to $35.25 billion a year ago.
However, woven garment exports experienced 0.47% growth, while knitwear saw 9.79% growth in the nine months leading up to March. "Since January this year, the apparel sector has experienced growth in shipments that exceeded expectations," Faruque Hassan, outgoing president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told in his interview to The Business Standard.
The apparel exporters have invested to produce high-value and new products with diversified fibre, which is aiding in achieving such growth, he added.
Some new markets – Japan, Australia, South Korea, and the Middle East – have also helped to increase shipments, he said.
Apparel Exporters Await a Big Jump
Apparel exporters are optimistic about growing their business this year as buyers are increasing their orders. Talking with TBS, Giant Group Director SM Majedur Rahman said, "In the last six months, we have enjoyed about 40% growth in orders." "We hope to complete the year with at least 30% growth," he added. Majedur mentioned that one of their largest US buyers has placed some high-value apparel orders, which will help them increase their products' average prices. BGMEA President Faruque Hassan expects apparel exports to improve in the coming days, as most brands have already cleared their inventories.
Buyers for Reducing Prices
Exporters have expressed concerns that buyers are pushing to reduce product prices even below those of last year. Aman Garment Managing Director Md Jasim Uddin said, "It will be very difficult to adjust the price by manufacturers alone as their increased utility and wage expenses have pushed them into a tight corner." Nipa Group Managing Director Md Khosru Chowdhury said they have already booked full capacity of orders until next June, but the prices remain about 11% lower than a year ago. Faruque Hassan said manufacturers have to increase their bargaining capacity to raise their prices. "It will not be logical when a buyer asks us to reduce prices after the wage hike," he said, adding that it is time to increase prices as buyers are enjoying good sales.
Some Challenges Remain
Faruque Hassan said despite an increase in utility prices, uninterrupted gas and electricity supply remains a challenge for apparel manufacturers. "When western countries are reducing their interest rates, in Bangladesh we are facing challenges to minimise the finance cost as bank interest rates are increasing," he added. Echoing the sentiment of the BGMEA president, Envoy Textile Ltd Chairman Kutubuddin Ahmed said they have spent an additional Tk29.47 crore in the first six months of this fiscal year due to gas price hikes. He mentioned that the mill's gas bill increased by 143% and financial expenses by 42.29%.
Home Textiles Back in Business
Among other major sectors, the home textile industry has registered positive growth in year-on-year exports for the last two consecutive months after about one and a half years Exports of home textile products posted 7.9% year-on-year growth to $97.2 million in March, compared to $90.1 million a year ago. Joseph Chowdhury, chief marketing officer at Momtex Expo Ltd, told TBS, "Some orders are coming to Bangladesh as global demand for home textiles is growing." "But we are still facing challenges to remain competitive with other countries as raw material prices and bank interest rates are not favourable for exporters," he added.
Overall Performance of Notable Sectors
Among other notable sectors, leather and leather goods experienced a negative growth of 13.65%, totalling $794.19 million in the nine months to March, down from $919.73 million a year ago. During the same period, export earnings from agricultural products stood at $715.84 million, marking 5.60% growth from a year ago. Export receipts from jute and jute goods again experienced negative growth of 5.60%, amounting to $659.54 million, according to EPB data. Another potential export sector, engineering products, also marked a negative growth of 2.77%, totalling $389.18 million.
