The government is set to fix the country's export earnings target at US$34.20 billion for the upcoming fiscal year (FY) 2014-15 amid disagreement amongst major stakeholders, sources said.
The Export Promotion Bureau (EPB) has projected the target, which sees an 11 per cent or $4.0 billion dollar rise over the current fiscal's export target of $30.50 billion.
The proposed target was placed at a meeting of the EPB Thursday, where leaders of major export-earning sectors, namely knitwear and woven garments, differed with the government's projection saying the sectors are now passing a transitional period following the ongoing workplace safety and compliance-related issues, sources said.
The EPB also expected that the country's total export receipts would reach $30.62 billion by the end of this FY, reflecting a 13.30 per cent growth over the previous fiscal.
"We have proposed the export earnings target for FY15, taking the last five years' growth in the merchandise shipments into account and also discussing with the exporters," Vice Chairman of EPB Shubhashish Bose told the FE Friday.
The EPB chief said they will send the proposal to the Ministry of Commerce (MoC) this week for approval. The country is depending on limited markets and limited products, the EPB official said adding the incentive packages provided to export sectors are not responsive enough to overcome the impact of the Eurozone economic crisis. The overall infrastructure of the country has not been developed to meet the required demand, he pointed out.
For the current fiscal year, all 21 major export items, barring petroleum products, have been projected to grow. These include knitwear at 10.20 per cent, woven garments 11.28 per cent, leather and leather products 25 and 35 per cent respectively, medicines 25 per cent, frozen food 14.78 per cent and agro-processed food 15.77 per cent.
Export of jute and jute products are expected to grow by 8.28 per cent due to a gloomy international outlook.
The upbeat forecast has been made despite the country's largest export group openly questioning the wisdom behind such a rosy projection.
"We don't think we'll achieve this target," said Bangladesh Garment Manufacturers and Exporters Association (BGMEA) vice president Shahidullah Azim. The grouping makes up more than 50 per cent of the country's exports.
During last one year especially after the Rana Plaza collapse, about 200 factories were closed due to various reasons including political impasse, failure to meet compliance requirements and ongoing factory assessment, he said. Many more are expected to be closed due to the inspection programmes, he added.
Orders are not increasing while buyers are no longer placing orders in units located in shared or rented buildings, he explained. The prices of products are not also increasing. Production cost has gone up significantly following the recent wage hike with other increased costs due to safety requirements.
The inspection programmes of three initiatives Accord, Alliance and BUET will end in December, he said adding a large number of factories need to be relocated and the reforms would take at least two years.
"Yes, once improvements take place, there will be good results," he hoped.
"But before that, the target for the next fiscal might not be achieved," he said.
The EPB slashed the target at $912.81 million with a growth projection of 8.28 per cent for the jute and jute goods sector. It expects the sector to end the current fiscal year with $843.01 million earnings against its target of $1.16 billion.
Frozen foods industry insiders said $762.72 million earning is not possible unless the government takes steps to explore the Russian market and raise black tiger production, allow vennamei cultivation and raise cash incentive.
Bangladesh earned $27.02 billion in FY 2012-13, $ 24.30 billion in FY 2011-12, $22.92 billion in 2010-11, $ 16.20 billion in FY 2009-10 and $15.56 billion in FY 2008-09 from exports respectively.
