Export growth remains negative in October too, data shows

Bangladesh’s exports are increasingly feeling the pinch of the Russia-Ukraine war as it has pushed inflation up in many economies including the west where consumers are spending less on non-essential items, such as clothes.

Apparel products, which accounted for over 82 percent of Bangladesh’s total exports in fiscal 2021-22, continue to fall, creating further pressure on foreign exchange reserves.

According to the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) data, the country’s apparel export declined to $2.4 billion in October with just three days in hand, down from $3 billion in September, the lowest in 13 months.

In August, Bangladesh exported garments worth $3.74 billion and the figure was $3.6 billion in July, BGMEA data shows. Apparel export in October 2021 was at $3.76 billion.

Bangladesh’s overall exports shrank 6.25 percent to $3.9 billion year-on-year in September as shipments of garments declined along with some other key products that showed negative growth, Export Promotion Bureau (EPB) data showed.

Exporters blamed the ongoing Russia-Ukraine war and its consequences including soaring inflation. They predicted that exports could witness slow or negative growth till January 2023.

“I told you earlier that the export of apparel will be affected after August. According to our daily trend analysis, exports in October will go below $3 billion,” Shahidullah Azim, vice president of BGMEA told Business Insider Bangladesh.

He said exports will continue to drop in the months to come as orders have fallen by 30 to 40 percent.

“Some of the factories are cutting their costs and working hours to cope with the situation,” he noted.

The energy crisis has added further woes to the exporters.

“Export orders are on a decline and we are toiling to stay competitive. Rising production costs and power cuts are loosening our competitiveness further,” said Shupolo Dewan, assistant general manager of Chittagong Denim Ltd.

He said shipments have been held up and many buyers are telling us not to proceed unless they say so.

“A number of giant brands have shut down their outlets in many cities. Besides, this Christmas festival retail customers will buy less than what they used to have before due to the inflationary pressure,” he said.

Replying to a quarry he said, fast fashion is the strength of Bangladesh. As these products are cheaper, people bought these products even during the pandemic time but the soaring inflation caused by the war keeps the buyers away even from cheap clothes.

BGMEA President Faruque Hassan said export growth will remain in negative territory in the October-December quarter as they did not get adequate orders.

“We are searching for alternative markets so that we can sustain in any adverse economic situation. I hope the crisis will be over by next year,” he said.

Bangladesh has set a target to export $80 billion by 2024 and $100 billion by 2026. Bangladesh’s export was $52.08 billion in 2021-22, of which apparel accounted for $42.61 billion.