Bangladesh export earnings drop as coronavirus bites back at Europe, US

Bangladesh’s export earnings have slipped back into the negative territory with a second wave of coronavirus infections surging in Europe and the US.

October exports dropped by 4.08 percent year on year to a little over $2.94 billion, missing the target by more than 6 percent after posting growth in the preceding three months.

After the pandemic began in China in late 2019, Bangladesh’s export earnings dipped to as low as $520 million in April 2020. To put it in context, the figure was half the remittances received that month and 85.37 percent less than the same month last year.

Export earnings turned around in May, growing almost three times over the April receipts, but with a 61.56 percent year-on-year drop, when the factories began reopening with relaxed restrictions.

Exports bounced back to grow in July and continued the trend steadily in the following two months, beating the targets.

Garment exporters in August said they were not worried about falling behind their peers in Vietnam in overseas sales.

They hoped exports would boost by December, buoyed by a surge in the demand in the Western world ahead of Christmas.

“But it’s not possible now. The second wave has turned our estimates upside down as sevetal countries have gone back into lockdown,” said Anwar-Ul-Alam Chowdhury Parvez, a former president of Bangladesh Garment Manufacturers and Exporters Association.

“And no one knows what will happen in the US after the Nov 3 presidential elections. It is feared that (the US) will go into a tough lockdown as well,” he said.

Parvez, the chairman of Evince Group, said orders have also dropped. 

“All in all, there will be a drought in exports in the next few months,” he added.

Mohammad Hatem, the vice-president of knitwear exporters’ lobby BKMEA, said he fears the negative growth will continue until December.

“It had appeared that the impact (of the pandemic) will go away. But it’s not happening now as the second wave of coronavirus infection has begun in Europe and the US,” said analyst Ahsan H Mansur.

The government has set a $48 billion export target for FY21 with a 20 percent growth.

In the July-October period, exports increased by around 1 percent to $12.84 billion compared to the same period last year, beating the target by nearly 0.4 percent, according to Export Promotion Bureau data released on Monday.

“We need to keep in mind that our export earnings had already been in a bad shape dropping every month before the pandemic. Clocking a 1 percent growth in four months during a pandemic is no mean feat,” said Mansur, the executive director of Policy Research Institute.

Apparel exports, which contribute to more than 80 percent of the total, however dropped by 1.2 percent year on year to $10.45 billion and missed the target by 0.9 percent.

Jute exports continued to grow despite the coronavirus crisis, increasing by over 39.5 percent to $438.8 million in the July-October period in comparison to the same period last year. The sector beat the export target by around 20.5 percent in this period.

Export earnings of the pharmaceutical sector grew by 20 percent amid the pandemic while leather and leather goods posted a 10.63 percent drop.