Hammer blow of Covid-19: Exports decline 18% in March

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Exports impacted adversely as the global retailers have canceled shipments of finished goods

The country’s export earnings in March declined 18.29% year-over-year to $2.73 billion as the global coronavirus pandemic starts taking its toll on the economy’s external front.

Export earnings during July-March of this fiscal year declined by 6.24% to $28.97 billion, which was $30.90 billion a year ago, according to the data of Export Promotion Bureau (EPB), released on Wednesday. 

Both economists and exporters attributed the drastic fall to the outbreak of coronavirus that has hit the global supply chain badly. 

Exports have been impacted adversely as the global retailers have canceled shipments of finished goods, while the supply chain with China, the largest destination for industrial raw materials for the local manufacturing business, also was almost halted due to the novel virus. 

Apparel sector, which accounts for 84.20% of total exports, witnessed a 7.12% decline to $24.10 billion during July-March, the first nine month of the current fiscal year.

As per the data, knitwear products earned $11.95 billion in the first nine months of this fiscal year, down by 6.61% year-on-year.

In July-March period, woven goods fetched $12.14 billion, posting a 7.61% fall against the same period of last year.

“Due to the outbreak of Covid-19, apparel makers have seen a huge quantity of their work orders cancelled or suspended,” BGMEA Director Sharif Zahir told Dhaka Tribune. 

Of the canceled work orders, some 40% was finished clothes and ready to ship, added Sharif. 

According to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) data, 1,140 apparel exporters have witnessed work order cancellations worth $3.16 billion so far, affecting nearly 2.26 million workers. 

“There was tension among the exporters and stakeholders about the export performance in March due to the coronavirus outbreak, which reflected in the earnings. This will be more severe in April and prolong for months,” Centre for Policy Dialogue (CPD) Research Director Khondaker Golam Moazzem said.

It would be very tough to come out of the current trouble time as the big and important export destinations such as US, Germany, UK and Spain were affected, added the economist. 

Among other major sectors, agricultural product earnings remained flat and stood at $722 million, while frozen and live fish earnings declined by 3% to $402 million against $419 million last year.

Leather and leather goods, the second largest exporting sector, saw a 10.78% fall to $688.51 million in the July-March period.

However, export earnings from the pharmaceuticals sector rose by 6.5% to $106.22 million, and plastic goods declined by 4.57% to $83 million during the nine-month period.

Specialized textile sector saw a close to 12% negative growth to $99 million, while home textile products fell by 7.59% to $598 million.

On the plus side, jute and jute goods, the third largest export earning sector, registered a robust 23.49% growth to $775.63 million during the period.