Bangladesh’s exports to the United States of America (USA) touched the $10 billion landmark in the just concluded FY22, posting a 49.38 per cent growth in the country’s largest export destination when compared year-on-year.

Export Promotion Bureau (EPB) data shows that Bangladesh earned $10.41 billion through exports to USA – which is 20 per cent of the total exports – in FY22, a significant increase from $6.97 billion posted in FY21.
Nagad

Bangladesh earned $52 billion through exports while posting a 34.38 per cent growth in FY22, compared to the $38.75 billion in FY21. This boost is riding on the apparel sector, which recorded 51.58 per cent to $9 billion in earnings, compared to $5.95 billion in FY21.

Matrix of $10 billion export earnings

Of the total export earnings, over $9 billion came from RMG products, of which $5.89 billion from woven products and $3.12 billion from knitwear products. Bangladesh exported home textile goods worth $311 million, followed by caps worth $281 million.

Leather and leather goods earned $422.85 million, of which $330.55 million came from leather footwear, $92 million from leather goods, and $267,902 from craft leather. Meanwhile, the non-leather footwear sector earned $353 million.

Bangladesh also earned $44.81 million from fish and crustacean exports, followed by$17 million from combs and hairpins, $17.54 million from sleeping bags, $17 million from wood furniture and $14 million from optical, photographic, and cinematographic products.

Germany is the second largest export destination for Bangladesh. Exports to Germany rose by 27.50 per cent to $7.60 billion in FY22, compared to $5.95 billion in FY21.   

Commenting on the robust export growth, Industry leaders and economists said the increasing demand for consumer’s goods, mostly clothing items, as well as increased prices helped the exporters’ earnings go up.

According to Centre for Policy Dialogue (CPD) research, prices of per unit apparel goods exported to the US market grew by 6.5 per cent during the first nine months of FY22.

What is behind the sharp growth?

Commenting on the growth, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan said, “Though the Covid-19 crisis disrupted the supply chain, we upheld our commitment to buyers amid the pandemic through timely delivery.

“The support provided by our government and workers made this possible. This is why the buyers’ confidence in us rose and they placed more orders.”

He continued, “We also met with US buyers in the October-November period last year as part of our apparel diplomacy to improve the buyer-manufacturer ties. With some persuasion, we managed to convince the buyers, which expedited the industry’s growth.”

“Both the prices and the quantity of goods exported to the US have gone up. Buyers increased prices of finished goods to accommodate the increased raw material prices.”

Hassan added that the export earnings will continue to go up in the coming months as the factories currently have adequate work orders, and the buyers are placing more for the upcoming seasons.

‘A good sign for Bangladesh’

Zahid Hussain, former lead economist at the World Bank Dhaka office, said, “The US is a big economy with stability in demand, and it is a good sign that Bangladesh recorded a 50 per cent growth.

“With the ease of Covid-19 pandemic, the demand for goods witnessed a sharp resurgence in the US market. Besides, the US buyers’ confidence in our competitors such as Pakistan, Sri Lanka, and Myanmar eroded due to political turmoil.”

He continued, “In addition, China’s zero tolerance policy on Covid prompted buyers to relocate work orders. As a result, Bangladesh received more work orders, which resulted in the sharp growth.

“Not only that, the contribution of the non-RMG sector has increased as well, which is yet another positive indication for Bangladesh, as it will help diversify the country’s export basket.”  

How can Bangladesh sustain this growth?
Prof Mustafizur Rahman, distinguished fellow at CPD, said, “Earning $10 billion from one country is definitely a good indicator. One of the key reasons behind this growth is the rise in imported raw material prices.”

“Bangladesh has to focus on increasing retention of earnings and local value addition to sustain this growth and grow further.”

He continued, “The US has a big non-cotton product market and the exporters should concentrate on grabbing this segment. The pace of high value product production must be increased too. In addition, we have to enhance productivity and product diversification.”