The country’s exports declined for the third month in May, compared with the same period of the previous year, as economic crisis in Europe and sluggish market in USA continued to take a toll on readymade garment exports.
The growth in exports in 11 months of the current fiscal year also plummeted to 7 per cent compared with the same period of the previous fiscal year when exports grew by 41.61 per cent.
According to the data released by the Export Promotion Bureau on Sunday, exports in May declined by 4.17 per cent to $2,199.42 million from $2295.10 million in May 2011.
The country’s exports declined by 7.23 per cent in March and 7.13 per cent in April compared with the same period of the last year, after posting moderate or little growth in the first eight months of the current fiscal year.
Besides, exports in July-May of the current FY stood at $21.97 billion, growing by 7 per cent from the same period of the previous fiscal year.
The export earning figure in July-May of the FY2010-2011 was $20.53 billion, which was 41.61 per cent higher than the exports in July-May of FY2009-2010 when the country exported products worth $14.50 billion.
‘Bangladesh’s exports continued to fall mainly because of the economic crisis in Europe. Besides, exports to the US market also fell in recent times as exports from some of the Caribbean countries to the US market have increased,’ said Mustafizur Rahman, executive director of Centre for Policy Dialogue while speaking to New Age on Sunday.
Mustafiz said that the demand in Europe was receding because of economic crisis.
He said that exports of knitwear products had dropped alarmingly. ‘We will have to find out as soon as possible the causes why export of knitwear products fell,’ he said.
He said that the drop in prices of cotton and yarn this fiscal year might have contributed to the falling export value of knitwear.
‘Besides, Bangladesh’s exporters might have lost some competitiveness because of increase in power and energy prices and problems caused by poor infrastructure,’ he said.
Mustafiz said that the government as well as other stakeholders should immediately work out a plan as economic crisis in Europe was spreading.
‘We will have to look at the regional markets like India and Japan and also Turkey,’ he said.
EPB officials said that apart from fall in exports of RMG products, the exports of jute and jute products slumped this fiscal year because of political crisis in some Middle-East countries.
They said that it was now almost certain that the government would fall short of its export target of $26.50 billion for this year as products worth $4.5 billion would have to be exported in one month against the average monthly export of around $1.9 billion.
EPB’s data showed that export in 11 months was 7.52 per cent lower than the strategic target of $23.76 million for the period.
Knitwear export grew by only 1.50 per cent in 11 months to $8.57 billion while export of woven products amounted to $8.70 billion, growing by 15.73 per cent. The growth of knitwear export in 11 months of the last fiscal year was 46.76 per cent and that of woven products 39.44 per cent.
Former president of Bangladesh Knitwear Manufacturers and Exporters Association, Md Fazlul Hoque, also attributed the fall in knitwear exports to the ongoing recession in Euro zone.
‘Euro zone debt crisis hampered knitwear export severely as Europe is one of the biggest destinations of country’s knitwear products,’ he said.
However, he does not see anything frightening in the fall of knitwear exports, saying that the export growth at 1.51 per cent may seem very gloomy but is not alarming.
The growth was far less than growth in 2010-2011 when knitwear export growth saw an abnormal boost of 46.76 per cent, mainly due to price-hike of raw materials particularly the price of cotton, which almost doubled at that time.
The prices of knitwear products increased remarkably which led to an abnormal growth in the sector, though the growth in terms of quantity was not so high, he said.
The export of jute and jute products also fell by 13.69 per cent to $889.45 million in 11 months from $1,030 million in the same period last year. The target for jute export was $1,202.51 million for July-May of this fiscal year.
Frozen foods export also fell by 2.08 per cent to $ 553.37 million in 11 months.
Leather export totalled at $ 302.90 million with a growth of 11.93 per cent while leather product export grew by 60.18 per cent to $ 83.28 million.
Economists said that the falling exports had already reduced the country’s gross domestic product growth. ‘Any further fall in exports will affect the balance of payment as well as the country’s foreign exchange reserve,’ said an economist.