Exports growing exponentially but not prices

The export of the country has almost achieved the annual target set for the current fiscal year in 10 months.

In the July-April period of FY22, exports grew by 35.14 percent to $43.34 billion against the entire year’s target of $43.50 billion, according to Export Promotion Bureau (EPB) data released on Monday.

Yet, exporters are finding it hard to get excited as the cost of doing business has increased significantly due to rising raw material prices. They say the buyers are not adjusting prices according to production costs.

“The figure is based on the covid year. According to the influx of work orders, the growth should’ve been 70 percent but due to unfair selling price, many factories are incurring losses instead of making a profit,” said Muhammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

Meanwhile, import cost has increased by 60 percent, and the raw material price is increasing at a regular interval, consequently, the manufacturing cost has increased by 30 to 35 percent in the last seven-eight months, Hatem said.

“Yes, this is true that we are getting the expected profit due to unfair prices,” Sahahidullah Azim, vice president of BGMEA told the Business Insider Bangladesh on Monday.

On top of that, a huge number of products are in sitting the port storage that could not be shipped due to supply chain disruption, Azim said, adding that some of the ships don’t anchor on the port timely, hampering export growth.

Azim said they are instructing their members not to entertain the unfair-price work orders to sustain the industry. “We have instructed our members to avoid the lower-rated work orders otherwise they will have to leave the business.”

In July-April ‘22, leather and leather goods export increased by 33 percent and fetched $1.02 billion, agro products export grew by 26.29 percent to $1.04 billion while garments export increased by 36 percent to $35.36 billion. Of these, knitwear export increased by 37.49 percent to $19.24 billion and woven 34.23 percent to $16.12 billion.

Unfortunately, at the same time, jute and jute good export decreased by 6.68 percent (year on year) to $966 million.

Despite the adverse situation in the world, the Bangladeshi exports fetched $4 billion in April with 51.18 percent growth. Though, it is lower than $4.76 billion in March.  

Exports slightly declined in April due to fewer working hours in Ramadan that came in early days of the month, exporters said.