Billion-dollar earners lose steam

Promising billion-dollar-club export earners beyond garments failed to hold steam as they showed negative pace in shipment for latest headwinds, thus upsetting Bangladesh's bid for product-basket diversification, sources said.
At least five potential sectors were earlier performing better, touching or crossing billion-dollar annual earnings till the fiscal year (FY) 2021-22. But now they start losing their footprints as the emerging sectors in the country's export-diversification arena, they said.
The recent slump in export earnings from the five-category products have affected the diversification move made by the government through boosting shipments of those products beyond the multibillion-dollar-earning sector-readymade garments (RMG), analysts say.
An FE analysis has found home textiles, jute and jute goods, engineering products, leather and leather goods and agricultural products-the billion-dollar forex earners-have lost their momentum over the last one and a half years.
Economists and industry-insiders say the failure in improving the global competitiveness, local import restrictions, and sluggish global demand are among the dampers.
Home textiles, Bangladesh's highest promising sector in export diversification, slipped 38.48 per cent in the first half (H1) of the current FY2023-24, the latest Export Promotion Bureau (EPB) data showed.
During July-December period of the current fiscal, the local home-textile industry's shipment dipped to only US$369.91 million from an impressive $601.26 million in the previous corresponding period.
The export earnings from the home-textile sector for the first time had crossed one-billion-dollar mark in FY2022.
Another sector-engineering products-also performed worst in the H1 of the current fiscal with its 3.08-percent fall in earnings.
During the first six months, the engineering-product manufacturers made shipments worth $253.05 million against $261.09 million in the same period last FY, the EPB data showed.
Earnings from engineering products had been on the rise till FY2022, with the zenith at $795.63 million. But the sector's turnover has been on a slide since the subsequent FY2023 through the current fiscal.
The country's struggling jute and jute goods sector's export earnings also dropped 10.24 per cent to $436.12 million during the H1 this fiscal from $485.88 million in the corresponding period of FY2023.
Meanwhile, jute regained its export might to enter the billion-dollar club in FY2021 earning $1.028 billion, which rose to $1.16 billion in the FY2022.
But in the last FY2023, it again made a dive to fall behind the billion-dollar status with earnings having declined to $912.25 million, the FE analysis has found.
Leather and leather goods also lost gear in the H1 of the current FY2024, falling short of the mark in foreign-exchange income from shipment to overseas markets.
During the July-Dec period of the current fiscal, the leather sector's foreign-exchange earnings had declined by 17.93 per cent to $523.03 million from $637.29 million in the corresponding period last fiscal, the EPB data showed.
The government has taken initiative to enhance Bangladesh's potential leather sector as one of the biggest export-earning hubs, by way of offering policy and fiscal supports every year.
Till last FY2023, the sector had proved its capacity boosting the foreign-exchange earnings to $1.223 billion. But it went on a downturn in the current FY as the earnings dropped 17.93 per cent during July-December period.
President of Bangladesh Engineering Industry Owners Association (BEIOA) Abdur Razzak says although the light-engineering sector was almost close to $1.0-billion earning in FY2023, now the global sluggish demand put "us on the back foot".
"We are hopeful about recovering the losses in the coming fiscal FY2025, when there is an outlook of higher global demand," he adds.
Chairman of Policy Exchange Bangladesh Dr Masrur Reaz told the FE that four key factors played foul with Bangladesh's billion-dollar-export earners.
"The lower export-competitiveness, lack of persistent and comprehensive efforts of the public-private sector, sluggish global demand, and the import restrictions locally on raw and intermediate goods have affected the export earnings," he added.
Although there is an outlook of improvements in the global demand but the local import restrictions already have pushed back the domestic industries in their output for next year's exports, Mr Masrur said.
Meanwhile, the overall export earnings in the H1 this FY2024 has maintained only 0.84 per cent growth to $27.54 billion from that of $27.31 billion in the corresponding period last FY2023, the EPB data showed.
The largest export-earning sector-RMG-also lost its breath during the first half of the current fiscal, with only a 1.72-percent growth in earnings-at a time when the country is in great need of foreign exchange to prop up depleting reserves.
The RMG sector made shipments worth $23.39 billion in the H1FY2024 against $22.99 billion in the same period last FY2023, the EPB data showed.

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