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Feb 23, 2011
Bangladesh exports surge
Asia Times Online :: South Asia news, business and economy from India and Pakistan
By Syed Tashfin Chowdhury
DHAKA - Exports from Bangladesh surged almost 40% in the past seven months with an impetus that could shatter full-year targets, as manufacturers made a greater variety of products while taking advantage of rising costs in rival China, improved efficiency and changes to import rules by the European Union.
Finance Minister Abul Maal Abdul Muhith told the inauguration ceremony of the 20th United States trade show in Dhaka this month that he "would not be surprised if exports reach US$20 billion during this fiscal year against the $18.5 billion target" and could reach $28 billion.
Exports increased 39.9% to $12.18 billion in the July 2010 to
January 2011 period compared with the same months a year earlier. That marks a sharp recovery from the 4.7% year-on-year decline during the first seven months of the 2009-1010 fiscal year and easily outpaces the nearly 12% increase recorded in July 2008 to May 2009 as the global financial crisis started to take its toll.
In January alone, exports rose 34.3% from a year earlier to $1.92 billion, beating the $1.90 billion government target by 28%, against the 18.5% margin by which the seven-month figures beat their target, according to the Export Promotion Bureau (EPB) of Bangladesh.
Export growth was fueled by gains in the staple sectors of knitwear and woven garments, while relatively new industries such as shipbuilding also helped to make up for declines elsewhere, including engineering and petrochemicals.
Knitwear exports gained 43% to $5.07 billion in the seven months to January and woven garments 39% to $4.39 billion. Home textiles from pillow covers to curtains jumped 87% to $376.8 million while frozen foods including fish, shrimps and other foods surged 52% to $384.3 million.
Smaller sectors saw similar growth, as consumers in the European Union, which takes just over half of Bangladesh's exports, and the American region (one third of total exports) increased spending as the global recession eased. Footwear exports gained 50% to $172.6 million, leather 29% to $149 million and leather products 145% to $31.4 million. Cotton and cotton product exports rose 34%, rubber exports doubled and raw jute and jute goods surged 54%.
Less impressively, exports in the engineering products sector, which includes iron and steel, bicycles, electronic products and engineering equipment, declined 7.5% to $165 million. Overseas sales of petroleum byproducts dropped 19% to $128.8 million and chemical products 21.4% to $51.9 million.
The country's young shipbuilding business - in May 2008 Bangladesh exported its first ship, to Denmark - recorded a more than 1,400% export growth to just under $18 million. While that was short of the $20 million seven-month target, the industry may yet reach its full-year export goal of $100 million, with at least 10 ships expected to be delivered within the next six months.
Sales of tea also disappointed, with exports sliding 67% to $1.5 million even as agricultural products overall increased exports 12% to nearly $194 million.
Bangladeshi exporters believe export growth will continue strongly as manufacturers in China face increasing production costs on rising raw material costs and higher wages, and look to produce goods elsewhere.
"China is steadily moving away from being the world's lowest-cost source of various products," a recent survey by Global Sources said after more than 70% of 232 respondents to a recent survey mentioned that they "increased export prices in 2010 in response to the rising cost of major raw materials and components".
About three quarters of companies operating in China expect to increase wages by over 5% in 2011, a survey by British recruitment group Hays showed on Wednesday. The survey found that more than half of 5,000 employers based in Shanghai and Beijing expect to raise salaries between 6-10% over the next 12 months while a third intend to hike them by more than 10%.
The companies looking to move to other countries such as Vietnam, India or Bangladesh "are those in cost-sensitive industries including garment production," China Daily reported last July, quoting Alexander van Kemenade of the Economist Intelligence Unit (EIU). The hourly labor rate for apparel manufacturing in China at that time had increased by 14% since 2009 to $1.84, the report said, citing EIU statistics.
The jump in hourly labor rates made "the prospect of producing goods in nearby Southeast Asian countries such as Vietnam or in Bangladesh, Sri Lanka and even Africa seem a viable alternative," China Daily reported.
Improved efficiency of some export sectors is also contributing to growth Bangladesh exports.
"Some major export sectors like knitwear, woven garments and others did not have the infrastructure to produce advanced products that could be offered at competitive prices," Kamal Uddin, in charge of research at the Bangladesh Knitwear Manufacturers and Exporters Association, told Asia Times Online. "But this scenario has drastically changed in the past one year through more investment in infrastructure and research and development."
Giving a further boost to growth in the textiles area are recently implemented revised rules of origin for products imported under the Generalized System of Preferences by the European Union.
"Already the knitwear sector growth is at 18% compared to the corresponding period of last year. I am certain that the growth will reach 43% by the end of this fiscal year," Uddin said.
Syed Tashfin Chowdhury is a senior staff writer at New Age in Dhaka.
(Copyright 2011 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
Bangladesh exports surge
Asia Times Online :: South Asia news, business and economy from India and Pakistan
By Syed Tashfin Chowdhury
DHAKA - Exports from Bangladesh surged almost 40% in the past seven months with an impetus that could shatter full-year targets, as manufacturers made a greater variety of products while taking advantage of rising costs in rival China, improved efficiency and changes to import rules by the European Union.
Finance Minister Abul Maal Abdul Muhith told the inauguration ceremony of the 20th United States trade show in Dhaka this month that he "would not be surprised if exports reach US$20 billion during this fiscal year against the $18.5 billion target" and could reach $28 billion.
Exports increased 39.9% to $12.18 billion in the July 2010 to
January 2011 period compared with the same months a year earlier. That marks a sharp recovery from the 4.7% year-on-year decline during the first seven months of the 2009-1010 fiscal year and easily outpaces the nearly 12% increase recorded in July 2008 to May 2009 as the global financial crisis started to take its toll.
In January alone, exports rose 34.3% from a year earlier to $1.92 billion, beating the $1.90 billion government target by 28%, against the 18.5% margin by which the seven-month figures beat their target, according to the Export Promotion Bureau (EPB) of Bangladesh.
Export growth was fueled by gains in the staple sectors of knitwear and woven garments, while relatively new industries such as shipbuilding also helped to make up for declines elsewhere, including engineering and petrochemicals.
Knitwear exports gained 43% to $5.07 billion in the seven months to January and woven garments 39% to $4.39 billion. Home textiles from pillow covers to curtains jumped 87% to $376.8 million while frozen foods including fish, shrimps and other foods surged 52% to $384.3 million.
Smaller sectors saw similar growth, as consumers in the European Union, which takes just over half of Bangladesh's exports, and the American region (one third of total exports) increased spending as the global recession eased. Footwear exports gained 50% to $172.6 million, leather 29% to $149 million and leather products 145% to $31.4 million. Cotton and cotton product exports rose 34%, rubber exports doubled and raw jute and jute goods surged 54%.
Less impressively, exports in the engineering products sector, which includes iron and steel, bicycles, electronic products and engineering equipment, declined 7.5% to $165 million. Overseas sales of petroleum byproducts dropped 19% to $128.8 million and chemical products 21.4% to $51.9 million.
The country's young shipbuilding business - in May 2008 Bangladesh exported its first ship, to Denmark - recorded a more than 1,400% export growth to just under $18 million. While that was short of the $20 million seven-month target, the industry may yet reach its full-year export goal of $100 million, with at least 10 ships expected to be delivered within the next six months.
Sales of tea also disappointed, with exports sliding 67% to $1.5 million even as agricultural products overall increased exports 12% to nearly $194 million.
Bangladeshi exporters believe export growth will continue strongly as manufacturers in China face increasing production costs on rising raw material costs and higher wages, and look to produce goods elsewhere.
"China is steadily moving away from being the world's lowest-cost source of various products," a recent survey by Global Sources said after more than 70% of 232 respondents to a recent survey mentioned that they "increased export prices in 2010 in response to the rising cost of major raw materials and components".
About three quarters of companies operating in China expect to increase wages by over 5% in 2011, a survey by British recruitment group Hays showed on Wednesday. The survey found that more than half of 5,000 employers based in Shanghai and Beijing expect to raise salaries between 6-10% over the next 12 months while a third intend to hike them by more than 10%.
The companies looking to move to other countries such as Vietnam, India or Bangladesh "are those in cost-sensitive industries including garment production," China Daily reported last July, quoting Alexander van Kemenade of the Economist Intelligence Unit (EIU). The hourly labor rate for apparel manufacturing in China at that time had increased by 14% since 2009 to $1.84, the report said, citing EIU statistics.
The jump in hourly labor rates made "the prospect of producing goods in nearby Southeast Asian countries such as Vietnam or in Bangladesh, Sri Lanka and even Africa seem a viable alternative," China Daily reported.
Improved efficiency of some export sectors is also contributing to growth Bangladesh exports.
"Some major export sectors like knitwear, woven garments and others did not have the infrastructure to produce advanced products that could be offered at competitive prices," Kamal Uddin, in charge of research at the Bangladesh Knitwear Manufacturers and Exporters Association, told Asia Times Online. "But this scenario has drastically changed in the past one year through more investment in infrastructure and research and development."
Giving a further boost to growth in the textiles area are recently implemented revised rules of origin for products imported under the Generalized System of Preferences by the European Union.
"Already the knitwear sector growth is at 18% compared to the corresponding period of last year. I am certain that the growth will reach 43% by the end of this fiscal year," Uddin said.
Syed Tashfin Chowdhury is a senior staff writer at New Age in Dhaka.
(Copyright 2011 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
