Doubts about achieving export targets in FY25

Mahfuja Mukul: Against the export target of $600 billion, the income in the first 11 months of the current financial year was $515.43crore, which is 8.47 percent less than the target.
To achieve the target for the financial year 2023-24, the income from export of goods in June, the last month of the financial year, should be $1 thousand 45 crore. But never before has the income of $1 thousand 45 crores in a single month. As a result, there are doubts about achieving export targets. Businessmen and economists think that it is not possible to achieve this target.
Traders and economists opined that it will be difficult to achieve the export earnings target for the current financial year due to global political unrest, high inflation and economic crisis in export destinations and rising cost of production.
Export targets and latest revenue
For the current (2023-24) fiscal year, the government had set a target of $6,000 billion in export revenue. Against the target, the income in the first 11 months of the fiscal year was $5 thousand 154 crore 27 lakh, which is 8.47 percent less. To achieve the target for the financial year 2023-24, the export income for the month of June should be $1,045 crore.
Exporters and analysts feel that achieving this target is not possible and it will be difficult to sustain positive growth. They fear that even if there is a positive growth, it will be insignificant.
Major export sectors are lagging behind targets. Even the first 11 months growth of many sectors is negative. The country’s main export sector, the ready-made garment industry, earned 7.63 percent less than the export target. From July 2023 to May 2024, it earned $4,385 million, while the target was $4,747 million. The target for the full fiscal year has been set at $522.72. crore
Export earnings from home textiles were targeted at $109 million. In 11 months, the income was $77.6 crore, which is 30.41 percent less than the target for the period.
The income of the third largest export sector leather and leather products is 14.17 percent behind the target. It earned $96.14 million against the target of $122.61 million.
While most of the major export sectors are in negative growth, the export earnings of agriculture and agricultural products are in positive trend. Export income of agricultural products increased by 8.2 percent in July-May. Against the export target of $93.44 million for the full fiscal year, the revenue in 11 months was $84.63 million.
Although there is a positive growth in the export income of plastic products, it is behind the target by 11.01 percent. In 11 months, the income was $22.22 million. The export target for the full financial year has been fixed at $27.5 million.
Export earnings of jute and jute products are in negative trend. In 11 months, the income was $784.6 million, which is 7.53 percent less than the target.
Non leather shoes have positive growth in revenue. In July-May, the income was $463.3 million, which is 6.87 percent more than the previous year. However, it is 7.24 percent less than the target.
Exports from frozen and live fish sector decreased by 13.56 percent. Against the target of $470 million for the full financial year, the revenue in 11 months was $345 million.
What participants say
Before going to the question of whether the target of export income will be achieved or not, the stakeholders are asking to think about whether there will be a positive growth in export income in the current financial year.
Due to increase in electricity, fuel and minimum wages, the cost of production of the ready-made garment industry has increased manifold. But the price of clothing products has not increased but the price per unit has decreased. On the other hand, apparel importers are ordering fewer products than before. Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Vice President Fazle Shamim Ehsan commented that as a result the desired growth in export income has not been achieved.
Incentives should be given to stay competitive in the global market and to explore new markets. Along with this, the business leader demanded that the tax at source should be reduced from 1 percent to 0.5 percent.
The exporters of the ready-made garment sector said that in order to stay competitive with competitors, it is necessary to ensure gas and uninterrupted power supply at the moment.
In addition, export earnings have been negatively affected due to the decline in global demand for leather and leather products.
In this regard, the general secretary of Bangladesh Tanners Association (BTA) Sakhawat Ullah told, “The tannery was shifted from Hazaribagh in the capital to Savar to make it environment friendly. But till now we have not been able to make the leather industry completely eco-friendly. Global buyers are not interested in purchasing products due to failure to comply with environmental regulations. Some don’t want to pay a good price again. As a result, the income from this sector is downward.
But we are hopeful that we can achieve the target in the next financial year. That is why the government and the industry owners have to work together, especially in preventing pollution and ensuring compliance’, said the BTA leader.
Executive Director of Policy Research Institute Ahsan H. Mansoor told, “The global economic and political situation is currently somewhat volatile, which has an impact on our economy, especially in the export sector. Demand for apparel products has decreased due to inflation in several countries. On the other hand, due to political unrest, buyers are showing some conservative attitude in placing work orders. As a result, there has been a negative impact on the export of all products including ready-made garments.
However, some improvement in the situation is being observed and exports will return soon, said the economist.
“I think there will be good growth in export earnings next year. But for this it is necessary to focus on the development of business environment and innovation of new products. Ahsan H. Mansoor commented that diversifying our exports is now very important and recommended providing equal opportunities to all sectors and diversifying products to achieve export targets.