US-China trade war spurs lo­cal ex­port growth, say ex­perts

The Myanmar Times - - Business | International - – Dhaka Tri­bune

BANGLADESH’S ex­port earn­ings be­gan reap­ing the ad­van­tage of on­go­ing US-China trade war, as its mer­chan­dise ex­port in July-Oc­to­ber reg­is­tered an 18.65pc growth to $13.65 bil­lion, rid­ing mainly on ap­parel and agri­cul­ture prod­ucts, trade an­a­lysts and ex­porters said.

The growth in Oc­to­ber was a stag­ger­ing 30.53pc to $3.71 bil­lion, ac­cord­ing to Ex­port Pro­mo­tion Bu­reau (EPB) data re­leased on Tues­day.

In­dus­try peo­ple and trade an­a­lysts said the on­go­ing US-China trade war di­verted many ex­port or­ders from China to Bangladesh, while de­liv­er­ies of ship­ments for Spring-sum­mer sea­son in the mar­kets of Europe and the US took place last month.

“Oc­to­ber was a peak sea­son for Bangladeshi ap­parel man­u­fac­tur­ers as the prod­ucts for Spring-sum­mer sea­son were de­liv­ered,” BGMEA se­nior vice pres­i­dent Faruque Has­san told the Dhaka tri­bune.

In July-Oc­to­ber pe­riod of the cur­rent fis­cal year 2018-19, Bangladesh earned $13.65 bil­lion, up by 18.65pc, which was $11.50 bil­lion in the same pe­riod last year.

The earn­ings were 12.57pc higher than the tar­get of $12.12 bil­lion set for the pe­riod of four months.

In Oc­to­ber, Bangladesh has earned $3.71 bil­lion with a 30.53pc growth, which is 32.68pc higher than the tar­get of $2.79 bil­lion set for the month. In Oc­to­ber 2017, Bangladesh ex­port earn­ings were $2.84 bil­lion, ac­cord­ing to the data of the EPB.

RMG sec­tor leads the growth

Ap­parel sec­tor, the $30,60 bil­lion in­dus­try with nearly 4 mil­lion work­force , has con­trib­uted over 83pc to the na­tional ex­port earn­ings in July-Oc­to­ber pe­riod of fis­cal year 2018-19, shows the data.

As per the EPB data, ex­port earn­ings from the ready­made gar­ments sec­tor rose by 20.08pc to $11.33 bil­lion dur­ing the pe­riod of four months, which was $9.43 bil­lion in the same pe­riod a year ago.

The sec­tor posted an 11.50pc in­crease over the tar­get of $10.16 bil­lion set for the pe­riod.

Of the to­tal amount, knitwear prod­ucts earned $5.88 bil­lion, which is 17.83pc higher than $4.98 bil­lion earned in the same pe­riod a year ago. Wo­ven prod­ucts earned $5.45 bil­lion, up by 22.61pc, com­pared to $4.45 bil­lion a year ago.

Faruque Has­san said many buy­ers, who have never sourced from Bangladesh, now started sourc­ing due to the US-China trade war to avert higher US tar­iffs.

“On top of that, we are di­ver­si­fy­ing prod­ucts and in­tro­duc­ing lat­est tech­nol­ogy to im­prove qual­ity and pro­duc­tion. The safety im­prove­ment that took place at our huge ap­parel in­dus­try helped grow the buy­ers’ con­fi­dence, which re­sulted in sharp growth in ex­port,” the Bangladesh Gar­ments Man­u­fac­tur­ers and Ex­porters’ As­so­ci­a­tion leader Faruque said.

Cen­tre for Pol­icy Dia­logue (CPD) re­search di­rec­tor Khon­daker Go­lam Moazzem also said the US-China Trade war helped Bangladesh reach the higher ex­port growth.

“Rise in ex­port earn­ings in­di­cates that the ef­fect of US-China Trade war is be­com­ing vis­i­ble on Bangladesh ex­ports”, Khon­daker Go­lam Moazzem told the Dhaka Tri­bune.

On the other hand, Bangladesh’s ex­ports to Eu­ro­pean coun­tries is reg­is­ter­ing bet­ter growth than usual, which ex­pe­dited the over­all ex­port growth, said the econ­o­mist.

In the re­cent months, US has wit­nessed rise in em­ploy­ment gen­er­a­tion push­ing up the de­mands of goods in the mar­ket, the sin­gle largest ex­port des­ti­na­tion for Bangladesh, he added.

Strat­egy needed for the sus­tain­abil­ity of growth

Trade an­a­lysts and sec­tor peo­ple opined that it is a great op­por­tu­nity for Bangladesh that re­quires in­tense at­ten­tion from the gov­ern­ment as well as ef­forts from sec­tor peo­ple to make the growth sus­tain­able.

Moazzem said be­fore the US-China trade war be­gins, there was an op­por­tu­nity for Bangladesh as the Chi­nese in­vestors were shift­ing their busi­nesses to else­where in the globe.

How­ever, Bangladesh failed to grab due to lack of pol­icy and ap­pro­pri­ate strate­gies, he added.

“Now, in ex­port mar­ket Bangladesh is tak­ing ad­van­tage of the trade war,” said Moazzem.

For long term ben­e­fits, Bangladesh has to at­tract For­eign Di­rect In­vest­ment (FDI) from China. To this end, it has to be com­plete in­fra­struc­ture de­vel­op­ment of Spe­cial Eco­nomic Zones (SEZs) on pri­or­ity ba­sis, said the econ­o­mist.

On the other hand, man­u­fac­tur­ers have to make in­vest­ment in tech­nol­ogy to aug­ment pro­duc­tion ca­pac­ity and es­tab­lish net­work with the po­ten­tial buy­ers, he added.

Ex­porters As­so­ci­a­tion of Bangladesh pres­i­dent Ab­dus Salam Mur­shedy said in re­tain­ing the growth and tap­ping the pre­vail­ing op­por­tu­nity, sec­tor peo­ple have to move to en­hance ef­fi­ciency and pro­duc­tiv­ity.

He also urged the gov­ern­ment to come up with pol­icy sup­ports to spur growth in in­dus­trial pro­duc­tion and ex­port wing.

Ex­port per­for­mance of ma­jor sec­tors

Among the ma­jor sec­tors, agri­cul­tural prod­ucts have posted a sharp rise by 80.37pc to $366.53 mil­lion in the given pe­riod.

In ad­di­tion, ex­port earn­ings from the phar­ma­ceu­ti­cals sec­tor rose by 34.67pc to $43.35 mil­lion, plas­tic goods by 33.140pc to $40 mil­lion, and spe­cial­ized and home tex­tiles by 52.32pc to $45.33 mil­lion and 3.37pc to $270 mil­lion re­spec­tively.

Ex­port earn­ings from the man­u­fac­tur­ing com­modi­ties in­clud­ing ce­ment, salt, stone, petroleum bi prod­ucts, slag and ash earned $1.30 bil­lion ,which is 18.17pc higher com­pared to $1.10 bil­lion a year ago.

How­ever, earn­ings from leather and leather goods wit­nessed a 19.43pc neg­a­tive growth to $345 mil­lion dur­ing the pe­riod, which was $428.44 mil­lion a year ear­lier. Jute and jute goods, the third largest ex­port earn­ers, reg­is­tered a 16.28pc neg­a­tive growth to $289 mil­lion dur­ing the July-Oc­to­ber pe­riod.

Ex­port earn­ings from frozen and live fish fell to $197.31 mil­lion in the given pe­riod com­pared to $227 mil­lion bagged year-over-year, the EPB data said.

Photo: EPA

A for­eign buyer in­spects den­ims in a stall dur­ing the sixth Bangladesh Denim Expo at the In­ter­na­tional Con­ven­tion City Bashund­hara in Dhaka, Bangladesh, in May 2017.

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