The net exports of Bangladesh’s ready-made garment (RMG) goods experienced a slight increase in the second quarter (October-December) of the current fiscal year 2023-24 from the previous quarters.
According to “Quarterly Review on RMG: October-December of FY24” published by the Bangladesh Bank, the import value of raw materials – raw cotton, synthetic/viscose fibre, synthetic/mixed yarn, cotton yarn, and textile fabrics and accessories for garments was $3,373.29 million in October-December of FY24, accounting for 28.65% of total RMG export earnings ($11,773.84 million).
As a result, net exports from this sector were $8,400.56 million in the second quarter of FY24, meaning the net exports of the RMG were 71.35% in the October-December quarter.
In the preceding quarter of FY24 (July-September), the net exports were 70.78%, meaning the net exports have increased by only 0.57 percentage points in three months.
The net exports experienced only a 2.16% increase over the previous quarter ($8,223.04 million in July-September of FY24) but a negative growth of 2.45% than $8,611.93 million in the same quarter of the previous financial year (FY23).
The central bank data also showed that the total export earnings from RMG stood at $11,773.84 million in October-December FY24 (Woven $5056.25 million and Knitwear $6,717.60 million), which was only 1.35% higher than the previous quarter but 7.46% lower than the same quarter of last fiscal.
The RMG sector has been facing numerous challenges such as the Russia-Ukraine conflict, Taka-Dollar depreciation, weak global demand for RMG, and global high inflationary pressure etc., all of which resulted in a slight edge down of exports in this quarter, the central bank said.
The main destinations of Bangladesh’s RMG exports are the United States, Germany, the United Kingdom, France, Spain, Italy, the Netherlands, Canada, and Belgium.
During October-December of FY24, the RMG export earnings from these nine countries stood at $7,954.77 million, which was nearly 68% of total RMG exports.
Moreover, during the second quarter of FY24, Bangladesh bagged export earnings worth $8,582.79 million from these nine countries, of which 92.68% ($7,954.77 million) was earned from the RMG exports.
During the quarter under report, RMG export earnings from these nine countries relatively declined by 1.87% compared to the previous quarter and 11.81% to the corresponding quarter of the last financial year.
The report warned that as the global economy is facing major challenges including subdued economic activities owing to higher inflation and higher interest rates, heightened uncertainties regarding the future geoeconomic landscape, weak productivity growth and a complex financial environment, export receipts from the RMG sector may also face some challenges in the upcoming months of the current fiscal year.
Some initiatives have been taken by the government and Bangladesh Bank, particularly the pre-shipment credit, incentives for export expansion, Export Facilitation Fund, Export Development Fund (EDF), and Green Transformation Fund (GTF).
The central bank stated that inter-apparel diversification, reducing lead time and increasing efficiency, ensuring effective research and development, exploring new global markets, skilled RMG workforce and modernization of production process should be priority areas to escalate the RMG export earnings in the future.
In the last fiscal year (2022-23), Bangladesh exported apparel worth $46.99 billion to its global destinations.
