DHAKA: Export receipts from some non-apparel sectors dropped in July-March mainly because of a gas shortage in the country, volatile economic conditions in the European Union and the effects of Brexit, according to industry people.
Some of the sectors that have potential but witnessed poor earnings in the first nine months of the current fiscal year are frozen and live fish, shrimp, petroleum byproducts, finished leather, specialised textiles, ceramics, bicycles, electronics and terry towel.
A volatile political and economic situation in major EU countries and Brexit put a negative impact on Bangladesh’s exports, exporters said.
Europe accounts for more than 60 percent of Bangladesh’s total exports and is the largest destination for exporters.
In July-March, earnings from frozen fish and shrimp exports declined 4.94 percent and 3.29 percent to $382.59 million and $325.24 million respectively, according to data from the Export Promotion Bureau.
Kazi Belayet Hossain, vice-president of Bangladesh Frozen Foods Exporters Association, said shrimp prices declined to $9 a kg from $12 last year, due to the economic uncertainty in the EU.
On average, the price of fish going to the EU fell 30 percent in the last one year although the export quantity of frozen foods and shrimps increased, he said.
Another potential sector terry towel experienced negative growth of 12.79 percent to bring in $32.59 million in the period.
Eleven out of 100 small terry towel factories have become bankrupt and nine were shut down as they could not use their full production capacity and faced capital shortage, said Shahadat Hossain, managing director of Toweltex, a leading exporter.
Factories cannot run at their full capacity for inadequate supply of gas, he added.
Hossain also said small terry towel factories are still suffering from the sudden yarn price hike in 2008 when local manufacturers had booked work orders by buying expensive yarn but the prices later fell worldwide.
Bangladeshi terry towels were competitive in the European markets before the GSP Plus status was awarded to Pakistan in 2014 for some garment items.
Both Bangladesh and Pakistan now compete in the same markets, but the latter has an added advantage as it grows cotton whereas Bangladeshi exporters rely on imports for the key raw material, Hossain said.
Export of finished leather decreased 4.79 percent to $201.05 million, data showed.
Saiful Islam, president of Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh, said finished leather exports declined mainly for environmental concerns and value addition.
However, export of leather goods and footwear increased significantly during the July-March period.
International retailers come to Bangladesh to buy leather goods, not finished leather, because of environmental pollution caused by the plants at Hazaribagh in the city.
Bangladesh used to export finished leather in bulk mainly to Italy and China. Now local manufacturers export more value-added leather goods compared to finished leather.
Value-added leather goods account for 76 percent of the exports in the sector with finished leather accounting for 24 percent. “I hope the ratio of leather goods exports will cross 80 percent at the end of this year as the value addition is increasing,” said Islam.
Bangladesh’s overall export has grown at more than 12 percent year-on-year in the last few years. But it has been 3.97 percent so far in the current fiscal year.
Exporters said Brexit has had a negative impact on Bangladesh’s export earnings because of the depreciation of the pound against the dollar.
The UK is the third largest export destination for Bangladesh and imports products worth more than $3 billion a year from the country.