Bangladesh's overall exports fell by 4.34 per cent in the last fiscal year, 2023-24, due to lower shipments of readymade garments (RMG), reflecting a slowdown in the country's industrial activity and economy.
According to the data, the country's export income was USD 44.47 billion in the last fiscal year, compared to USD 46.49 billion in the 2022-23 fiscal year. The central bank stated that it compiled the export figures provided by the National Board of Revenue (NBR).
The Export Promotion Bureau (EPB) has yet to release the full export data for 2023-24. In July, the agency under the Ministry of Commerce announced it would refrain from updating the statistics for three months to ensure accurate reporting.
The decision was made by the central bank after the country's balance of payments (BOP) showed USD 14 billion less than the figures published by the EPB. In the latest BOP, Bangladesh Bank reported that export value, calculated on a free on board (FOB) basis for the BOP, stood at USD 40.8 billion in the 2023-24 fiscal year.
When goods are shipped on an FOB basis, liability and ownership of the goods rest with the buyer. A senior Bangladesh Bank official explained that they do not use the FOB method when calculating overall exports, which is why there is always a gap between the export figures used in the BOP and the overall exports.
The newly elected president of the Bangladesh Garments Manufacturers and Exporters Association (BGMEA), Khandaker Rafiqul Islam, stated that, according to internal information, their exports to Europe and the United States are in a negative state.
Business slowed after the start of the Russia-Ukraine war as demand for clothing fell. This was due to stockpiles of previously shipped products, leading customers to halt further purchases.
He mentioned that buyers usually place orders in July and August, but due to political changes following the recent popular uprising, they have become cautious. However, he expressed hope that progress is being made and that if the situation normalises, exports may improve this year.
Exports of home textiles, the fourth largest item in the country's export sector, reached USD 782 million in the 2023-24 fiscal year, down from USD 1.08 billion in the 2022-23 fiscal year.
Leather and leather products, the third largest export product, recorded a notable USD 1.03 billion in export earnings last year. This figure increased to USD 1.17 billion in the 2022-23 fiscal year.
Meanwhile, due to the abnormal rise in fuel prices, the production cost of garments has increased by about 20 per cent. The electricity and gas crisis has adversely affected this sector, which is the country's main source of export income.
In the meantime, Walmart, the country's largest clothing buyer, has begun cancelling global orders, impacting Bangladesh as well.
Businessmen in this sector have stated that it will be difficult for the factories to handle this pressure. However, they are currently monitoring the situation.
Director of the Bangladesh Policy Research Institute (PRI) and European trade researcher, Dr Mohammad Abdur Razzaque, noted that Bangladesh is exporting essential garments at reasonable rates, but the demand for these items has decreased in the European market. Demand for affordable clothing has declined in Europe, where inflation-hit consumers are facing higher prices for all goods.
