Export revenue increases in FY2020-21 even during pandemic

The country’s export earnings grew by 15 per cent in 2020-21 fiscal even during the coronavirus pandemic.

Traders said export sectors saw stable work orders and that would increase employment and export revenue in coming days.

People concerned said the trend to lay off workers at the beginning of the pandemic no longer exists plus factories are employing more workers because of additional work orders.

Like export revenue, inward remittance also rose by 36 per cent to a record Tk 24.78 billion (2,478 crore) in 2020-21 fiscal. Foreign currency reserves surpassed $46 billion (4,600 crore) from export and remittance combined and that can meet the country’s import costs for 11 months.

Usually it is necessary for a country to have a foreign currency reserves enough to pay its import costs for three months. Fall in foreign currency reserves results in devaluation of local currency and increased prices of products.

Good news came from apparel sector in export earnings with various sectors including jute, home textile, agriculture and agro products, leather and leather goods showing upward trend.

The president of the Bangladesh Garments Exporters and Manufacturers Association, Faruque Hassan told Prothom Alo factory production was on during the pandemic making an upward trend in export possible. Work orders from Europe and North America also increased.

“Export earnings increased in terms of money because of increased prices of cotton, fabric and other raw materials. Even though buyers didn’t raise the apparel prices but we believe increased export revenue will boost our confidence,” he said.

Faruque Hassan mentioned many factories were forced to reduce workforce during coronavirus. Now many factories are recruiting workers again. He expected new employment would be generated in various sectors related to apparel sector.

According to the latest data released by Export Promotion Bureau on Monday, export earnings rose to $38.76 billion (3,876 crore) in 2020-21 fiscal from $33.67 billion (3,367 crore) in the preceding year. However, export revenue increased in 2020-21 fiscal but couldn’t reach the pre-pandemic period as yet.

Like Bangladesh, export revenue of other countries also grew. Vietnam’s export earnings rose by 31 per cent to $130 billion (13,000 crore) in January-April of 2021. India’s export increased by 47 per cent in April-June of 2021 but its export earnings dropped by 7 per cent to $290 billion (29,000 crore) in 2020-21 fiscal.

The 15 per cent growth in Bangladesh’s export earnings last fiscal was a five-year high. Export earnings dropped by about 17 per cent in the preceding fiscal as factories were closed for a month since 26 March last year after the first case of novel coronavirus was reported in the country on 8 March. Export demands also dropped.

Almost all large sectors saw upward trend in export in the last fiscal. Export earnings from readymade garment sector increased by 13 per cent to about $31.46 billion (3,146 crore), contributing a little over 81 per cent of the total export. Jute and jute processed products came in second. Export revenue in this sector increased by 32 per cent to $1.16 billion (116 crore). Home textile sector also performed well, rising by 49 per cent to bring $1.13 billion (113 crore) home.

Export of agriculture and agro products also increased. Export earnings from this sector increased by 19 per cent to $1.3 billion (103 crore). Dry food like biscuits and Bombay mix are a big sub-sector of the agro products export. Earning from this sub-sector rose by 46 per cent to $280 million (28 crore). Export of leather, leather goods and leather footwear also increased by 18 per cent to about $940 million (94 crore).

Export revenue from light engineering products also increased significantly, rising by 81 per cent to $530 million (53 crore). Besides medicine and lather footwear, export of non-leather shoes rose by 24 per cent, chemical products by 41 per cent and frozen foods by 5 per cent.

Deputy managing director of leading leather goods exporter Apex Footwear Limited Abdul Momen Bhuiyan told Prothom Alo Italian buyers purchased huge quantities of leather at a low price from Savar leather industrial park and that was also a big reason to boost up export earnings.

Work orders are satisfactory though overall flow of orders hasn’t been as much as expected as yet. However, everything depends on Covid-19 situation, he observed.

Research director at private research organisation Centre for Policy Dialogue Khandakar Golam Moazzem thinks several reasons contribute to the growth in export earnings. These includes being able to operate the factories, shifting orders from India, Myanmar, in some cases from China, to Bangladesh and emergence of new buyers in various sectors other than the apparel sector.

“Europe and North America have been reopening everything after vaccinating a large portion of their population. Now our only goal is to arrange vaccines and continue mass vaccine campaign and there is no alternative to that now,” Golam Moazzem said.