RMG export income rises, raw material imports fall in Q1
The country's garment exports amounted to $12.25 billion in the first quarter of this year, while the raw material imports for that sector during the same period were $3.54 billion, according to Bangladesh Bank data.
Value addition during this period was $8.70 billion or 71%, which was the highest ever in the country's history.
Fazlee Shamim Ehsan, vice president of the Bangladesh Knitwear Manufacturers and Exporters Association, told TBS, "We had to import raw materials three months earlier for exporting products in the January-March quarter of this year. If you consider import and export during the same time it would appear inconsistent."
He said, "Many traders are currently not able to open LCs due to various conditions imposed by the central bank on imports and the shortage of dollars in banks. Consequently, the import of garment products has decreased."
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Considering the garment raw material imports in the October-December quarter of 2022 and the export earnings in January-March quarter this year, the value addition in this sector was $8.14 billion or 70%, which was very high.
Regarding that calculation, Fazlee Shamim Ehsan said he was not able to clarify it immediately.
Imports fell by 34.36% in the first ten months of FY23, compared to the same period previous year. Imports in the July-April period of the outgoing fiscal year were $56.36 billion dollars, which were $76.99 billion in the same period of FY22, according to the central bank.
The import of industrial raw materials for garments was $19.21 billion in the first ten months of FY23, which was $28.19 billion or 31.85% higher in the same period of the previous fiscal year. At the same time, capital machinery imports decreased by $16 billion or 56.91% in ten months of this year.
A leader of the Bangladesh Garment Manufacturers and Exporters Association said on condition of anonymity that they reduced importing raw materials due to the dollar crisis, which in turn reduced their production. In this situation there is no reason for an increase in the garment exports.
He said, "Our data and observations do not match with the information provided by the central bank. The picture is not the same in all the export destinations. There is some doubt as to where these products are exported, and how they are registered in the system."
According to a central bank report, the country's exports to the UK and France have increased in the last three months (January-March 2023), but, exports to the US and Germany have declined during that period.
The managing director of a number of banks told TBS on condition of anonymity that the export revenue from a number of countries has increased, but Bangladeshi garment makers did not export to those countries that much. They think that some black money from abroad is laundered to the country in the guise of export earnings.
Total export earnings from readymade garments stood at $12.25 billion in January-March FY23 which was 3.67% lower than that of the previous quarter but 6.32% higher than the same quarter of the last year.
Due to the potential threat of a global recession, the buyers and brands of our major export destination countries are facing slow growth of demand which is resulting in our RMG sector to witness a slight downturn in the growth.
