RMG export fell by 1.64% in 1st quarter of FY20

According to the Export Promotion Bureau (EPB) data, earnings from RMG exports in the three months of FY20 fell by 1.64% to $8.05 billion from $8.19 billion in the same period of FY19.

Earnings from woven garments fell by 2.45% to $3.88 billion in July-September of FY20 from $3.98 billion in the same period of last fiscal year. On the other hand, knitwear export fell by 0.87% to $4.17 billion from $4.20 billion.

Ahsan H Mansur, Executive Director of the Policy Research Institute of Bangladesh said, “It is not a good thing and the government will have to rethink the domestic policy to achieve required export earnings growth.”

He said although it was too early to make comments on a possible global recession, it seemed the global economic slowdown might hurt Bangladesh’s exports this year.

“We thought that the US-China trade war would help us grow our exports but it could not give us more benefits,” Mansur said.

He said that the government should rethink the exchange rate as an immediate reviving tool for export growth.

“The recent export order situation is not good. The overall consumption of RMG products has decreased in the globe as consumers are in fear of a possible economic recession due to recent slowdown in the US economy, dismal economic performances in the UK and Germany, lowest ever industrial production growth in China, shrinkage of the economies of Argentina, South Africa and Iran,” Mahmud Hasan Khan Babu, former Vice-President of the Bangladesh Garment Manufacturers and Exporters Association said.

2019 BD RMG export scenario

Figure 2: 1st quarter of FY20 RMG export scenario.

He said that global consumers had been decreasing their purchase and going for more durable products, whereas Bangladeshi manufacturers expanded their capacity without any study on global consumption trends.

If the currency rate is not rearranged, Bangladesh will have to face serious challenges in the export market up to the end of 2020, Babu added.

Due to the unplanned expansion, our production is increasing in quantity but we have failed to gain the price benefits, he also said.

Though experts of Bangladesh textile and apparel industry claiming that RMG export declined due to less consumption of RMG products all over the world for US-China trade war, Brexit issue, contraction of the economies of Argentina, South Africa and Iran instilled recession fears in the global consumers.

However, its major competitor Vietnam’s textile and apparel export is increasing. Vietnam apparel export posted a 2.2% growth to $3.37 billion in August.

Bangladesh was getting the short-term benefit due to the US-China trade war, the benefit was very insignificant. Mainly, the country needs to diversify its trade in a large way for sustainability, some industry experts suggested.

Export earnings from leather and leather goods in July-September of FY20 fell by 5.06% to $254.39 million from $267.94 million in the same period of last fiscal year.

Export earnings from leather-footwear in the first quarter decreased by 9.28% to $159.23 million while other leather products fetched $64.47 million with a 25.28% growth in the period.

Earnings from the home textile export in July-September of FY20 fell by 11.67% to $179.30 million from $203 million in the same period of FY19.

Export earnings from agriculture products in the first quarter of FY20 fell by 10.03% to $262.57 million from $291.83 million in the same period of FY19.

The export of jute and jute goods increased by 1.84% to $220.85 million from $216.87 million.

Export earnings from frozen and live fish decreased by 9.08% to $125.20 million while the shrimp export fell by 11.49% to $100.05 million in the first quarter of FY20.

Export earnings from engineering products in July-September of FY20 grew by 23.37% to $93.02 million from $75.40 million in the same period of last fiscal year, the EPB data showed

 

 

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