Bangladesh’s apparel might propelled the achievement, while some apparel-makers doubt record forex earnings
For the first time in history, Bangladesh's export earnings crossed the $5 billion-mark in November, according to the Export Promotion Bureau (EPB), thanks to resurging Western fashion orders, pricier raw material imports and shipment of on-hold export consignments.
The export earnings were $3.91 billion and $4.36 billion in September and October respectively.
On a positive trend, the earnings in the first five months of FY23 grew by 11% compared to the corresponding period of last year, show the latest EPB data on Thursday.
According to the bureau, Bangladesh exported goods worth $5.09 billion in November, which was 26% higher than the corresponding period of the previous fiscal year.
Meanwhile, Bangladesh also bagged the second position again in the global apparel export market in 2021, according to the recent World Trade Organization (WTO) Trade Statistics Review, as the country was pushed back in third position by Vietnam in 2020.
Exporters and EPB officials attributed the overall success to start producing relatively higher value products compared to the past.
"Apparel export growth to non-traditional markets such as Japan, Korea and Australia also contributed to this achievement," AHM Ahsan, vice-chairman of the EPB, told The Business Standard.
However, some apparel-makers did not agree with the bureau's export data.
"EPB's data do not seem credible," Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers Association (BKMEA), told The Business Standard.
He said exports are increasing a bit, but not at the pace claimed by the EPB. Raw material import data against export orders do not support it either.
However, the EPB vice-chairman said they calculate the export statistics based on the revenue board information.
The local apparel industry stands for Bangladesh's 82% export earnings.
According to the latest WTO trade statistics review, Bangladesh has now 8% of the global share of ready-made garment export, $35.8 billion, in 2021.
Vietnam's share of readymade garment exports fell from 6.4% in 2020 to 5.8% in 2021 followed by Türkiye (3.5%), India (3%), Malaysia (2.7%), and Indonesia (1.7%). China has 32.8% of the global clothing market share worth $176 billion.
Apart from apparel, many other sectors failed to meet the anticipated export earnings in the first five months of the current financial year.
Echoing Hatem on EPB data credibility, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan told TBS that the growth is not supposed to be at such a high rate.
"Orders had been plummeting in the last couple of months, but now it ticked up a bit recently," he said.
To make sense of the apparel export growth, the BGMEA president pointed out a surge in raw material prices, resuming shipment of on-hold consignments and switching to manufacturing of high-end clothes in recent times.
According to the EPB, exports of frozen and live fish, agricultural products, jute and jute goods, specialised textiles and home textiles decreased in July-November compared to the same period of the previous year.
On the other hand, exports of some products including leather, leather items and plastics increased in July-November.
Remittance falling on uniform rate
Money transacted home by Bangladeshi nationals abroad has been on a gradual fall since banks introduced the uniform dollar rate in September.
According to the central bank, the country received $1.5 billion per month on an average from September to November. In November, the remittance inflow stood at $1.59 billion.
But the remittances were $2.09 billion in July and $2.03 billion in August.
In the September-November period of FY23, the remittance outlook was at $4.65 billion – $267 million or 5% less than the corresponding period of the previous year.
"The introduction of a uniform dollar rate by banks for remitters is one of the key reasons for the fall," Zahid Hussain, former lead economist of World Bank's Dhaka office, told The Business Standard.
He also pointed the finger at different greenback rates for the while collar and blue-collar Bangladeshis abroad.
The white-collar job holders are getting Tk107 for remitting through the formal banking channel. But blue-collar job holders, who are getting paid in bank cheques, are being offered Tk99.
Zahid Hussain said only a very small number of expatriates are white collar job holders, which is only 10%. More than 90% of the expatriates do blue collar jobs. The low dollar rate to the majority of the migrants is contributing to the remittance fall.
Mustafizur Rahman, distinguished fellow at the Center for Policy Dialogue (CPD), said dollar rates offered by the formal channel and informal Hundi are quite close. Therefore, it does not seem that Hundi is eating up too much of the foreign currency inflow.
He called for investigations by the central bank to verify whether hundi syndicates are buying remittances abroad and investing there.
According to the central bank, remittances through banking channels totalled $21.03 billion in FY22 – which is 15% less than the previous fiscal year.
In FY22, around 9 lakh people went abroad, but it failed to boost the remittance inflow eventually.