- Bangladesh’s March exports: $5B for 4th straight month!
- Consistent growth strengthens reserves, boosts stability
- Despite uncertainties, exports surged 9.88% to $5.10B
- Challenges loom as utility and bank costs impact manufacturing despite successes
Bangladesh’s merchandise exports have once again breached the $5 billion milestone in March for the fourth consecutive month, marking a significant milestone amidst global economic uncertainties. This achievement not only provides relief to the country’s dwindling foreign exchange reserves but also reflects the resilience and growth potential of its export sector.
Despite facing economic challenges both globally and domestically, Bangladesh’s export sector has displayed remarkable resilience. In March, export receipts surged to $5.10 billion, showcasing a commendable year-on-year increase of 9.88%. While this figure represents a slight dip from the previous month’s record of $5.19 billion in February, it nonetheless underscores the consistent upward trajectory of the country’s export performance.
Bangladesh’s Export Milestone – March 2024
- $5.10 Billion in Merchandise Exports
- Surged by 9.88% YoY
- 4th Consecutive Month Above $5 Billion Mark
- February: $5.19 Billion
- March: $5.10 Billion
Impact on Foreign Exchange Reserves
The sustained growth in merchandise exports is expected to bolster Bangladesh’s foreign exchange reserves, offering stability and resilience to its economy. As per data from the Export Promotion Bureau (EPB), gross reserves stood at $19.45 billion as of 27 March. This influx of foreign currency not only strengthens the country’s monetary position but also mitigates volatility in the dollar market, enhancing investor confidence and economic stability.
While the surge in exports is a positive indicator for Bangladesh’s economy, it is noteworthy that inward remittances witnessed a slight decline in March, standing at around $1.99 billion. This downturn marks the end of an upward trend observed in the preceding months when remittance inflows consistently exceeded the $2 billion mark. Despite this dip, the overall trend remains positive, contributing to the country’s foreign exchange reserves and supporting household incomes.
Apparel Sector Driving Growth
The backbone of Bangladesh’s export sector remains its vibrant apparel industry, which accounts for a significant portion of the country’s export earnings. According to EPB data, apparel exports in March recorded a notable increase of approximately 11%, reaching $4.34 billion compared to $3.89 billion in the same month last year (2023). This growth is attributed to a 16.47% rise in knitwear exports, totaling $2.42 billion compared to $2.07 billion last year. Additionally, woven apparel shipments increased by about 6.26%, reaching $1.93 billion, up from $1.81 billion.
Apparel Sector Driving Growth in Bangladesh’s Export
March Apparel Exports: $4.34 Billion
Year-on-Year Increase: Approximately 11%
Knitwear Exports: $2.42 Billion
Woven Apparel Shipments: $1.93 Billion
Knitwear Exports Growth: 16.47%
Woven Apparel Shipments Growth: 6.26%
Furthermore, EPB data shows that overall export earnings rose by over 4.39% to $43.55 billion in the first nine months of the current fiscal year compared to $41.72 billion in the same period last year. Specifically, apparel exports increased by over 5.53% to $37.20 billion during this period, compared to $35.25 billion a year ago. However, while woven garment exports saw a modest 0.47% growth, knitwear experienced a more significant growth of 9.79% in the nine months leading up to March.
Faruque Hassan, the outgoing president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), noted that the apparel sector has witnessed an unexpected surge in shipments since January 2024. This growth is attributed to apparel exporters’ investment in producing high-value and new products with diversified fibers. Additionally, new markets such as Japan, Australia, South Korea, and the Middle East have contributed to the increase in shipments.
A big jump
Apparel exporters are filled with optimism regarding their business prospects for the current year, buoyed by the increasing orders from buyers.
Majedur Rahman, Director of Giant Group, revealed a significant 40% surge in orders over the past six months. He expressed confidence in maintaining this growth momentum, aiming for a minimum of 30% growth by the year’s end. Rahman also highlighted the significant orders received from one of their major US buyers, which is expected to drive up the average prices of their products.
BGMEA President Faruque Hassan shares this optimism, foreseeing an upward trend in apparel exports as most brands have already cleared their inventories.
Some challenges remain
Despite the rise in utility costs, ensuring uninterrupted gas and electricity supply continues to pose a challenge for apparel manufacturers, according to Faruque Hassan.
He added, “While Western countries are decreasing their interest rates, Bangladesh faces challenges in minimizing financial costs as bank interest rates are on the rise.”
In line with the sentiment expressed by the BGMEA president, Kutubuddin Ahmed, Chairman of Envoy Textile Ltd, highlighted the significant impact of gas price hikes. He noted that the company incurred an additional expenditure of Tk29.47 crore in the first half of the fiscal year due to these hikes, with the mill’s gas bill soaring by 143% and financial expenses by 42.29%.
Home textiles back in business
In addition to other significant sectors, the home textile industry has experienced positive growth in year-on-year exports for the past two consecutive months after a hiatus of about one and a half years.
In March, exports of home textile products showed a 7.9% year-on-year increase, reaching $97.2 million compared to $90.1 million in the previous year.
Growth in Home Textile Exports in March
- Home Textile Exports: $97.2 Million
- Year-on-Year Increase: 7.9%
Joseph Chowdhury, Chief Marketing Officer at Momtex Expo Ltd, informed that Bangladesh is receiving some orders due to the growing global demand for home textiles. However, he emphasized the challenges in maintaining competitiveness with other countries, citing unfavorable raw material prices and bank interest rates for exporters.
Overall performance of notable sectors
Among other significant sectors, leather and leather goods witnessed a decline in growth, with a negative growth rate of 13.65%. This sector’s total exports amounted to $794.19 million in the nine months leading up to March, down from $919.73 million recorded a year earlier.
Bangladesh’s Export Performance in March
• March Export Receipts: $5.10 Billion
• Year-on-Year Increase: 9.88%
• February Export Receipts: $5.19 Billion
In contrast, export earnings from agricultural products saw a positive trend during the same period, registering a growth rate of 5.60%. The total export earnings from agricultural products stood at $715.84 million, marking an increase compared to the previous year.
Export receipts from jute and jute goods continued to decline, experiencing a negative growth rate of 5.60%. According to EPB data, the total export earnings from this sector amounted to $659.54 million during the specified period.
Similarly, the export sector of engineering products also faced negative growth, with a decline of 2.77%. The total export earnings from engineering products amounted to $389.18 million during the same period.
