Dhaka,  Sunday
21 July 2024

EXPORTS DATA IN A MAZE

Where do imported raw materials go?

Jannatul Ferdushy, Dhaka

Published: 07:43, 10 July 2024

Where do imported raw materials go?

photo: Messenger

Exporters and the government's Export Promotion Bureau (EPB) are embroiled in a dispute over export data. Exporters claim that actual export volumes are lower than the figures published by the EPB. Paradoxically, imports of raw materials are increasing. This discrepancy raises a critical question: What is the destination of these imported raw materials?

The garment manufacturers mostly rely on the data of the central bank as far as the country's exports and imports are concerned. According to Bangladesh Bank (BB) data, imported yarn, the core raw material for garment manufacturing, has increased by 12.7 percent from $2.34 billion in July to April in 2023 FY to $2.63 billion during the same period in the current year.

Meanwhile, the garment sector, the main contributor to export earnings, is expanding as capital goods imports also rose during the four months in 2024. Data shows that during July to December, capital goods imports were $5.58 billion in six months, while imports stood at $3.36 billion in four months, from January to April. The average monthly import stood at $931 million in the first six months and $840 million in four months. Individuals concerned believe that heavy machinery imports for the government's development projects have decreased as most of the prioritised projects have been completed, so currently, most of the machines are being imported for business expansion, especially in the garment sector.

Chemical imports during July to December stood at $1,654 million, while during January to April they stood at $1,129 million. Average monthly imports in the first six months stood at $275.66 million and $282.35 million in four months of July-April 2024.

Besides, accessories imports for the garment sector also increased throughout the year. July to December accessories imports stood at $3,657.7 million and during January to April at $2,655.7 million. Monthly average imports stood at $609.61 million in the first six months and $663.92 million from January to April.

Raw cotton imports: The data shows that raw cotton imports were $2,908.8 million in the July to December period and $1,640.3 million in January to April. Monthly average imports are $484.80 million and $410.08 million respectively.

Vice President of Bangladesh Textile Mills Association Md. Fazlul Hoque told The Daily Messenger, “The exporters are importing yarn from India, leaving the local market, as the Indian yarn is cheaper than the local market. So, imports of yarn are rising. Currently, local yarn is selling for $3 per kg while Indian yarn is $2.8 to $2.9 per kg.”

He added, “The data of EPB was correct in 2021-22, but currently the data is not matching with the actual export scenario.”

Industry-related people think that there is a massive ambiguity between data and exporters' opinions, especially when the central bank also finds evidence of huge money laundering behind exports and imports.

As a result of various steps taken by the government, export earnings increased five times to $55.56 billion in FY 2022-23 compared to FY 2005-06. During July-April of FY 2023-24, export earnings reached $47.5 billion, which is 3.93 percent higher than the corresponding period of the previous fiscal year.

The garment sector, the largest foreign currency earner, has yet to receive Tk 61,191 crore in three months of 2024 against garment exports of Tk 161,577 crore. Unfortunately, the country's foreign exchange reserve is falling to an alarming level.

According to Bangladesh Bank, during three months, Tk 100,386 crore has been received against garment exports.

Exporters repeatedly complain that the export data released by the EPB every month doesn't match reality. They claim they don't export as much as the data shows.

BGMEA president S M Mannan Kochi told The Daily Messenger, “The export data EPB releases every month doesn't match the actual exports. In fact, work orders have depleted due to the Russia-Ukraine war.”

But experts think that EPB's data is justified, and that exporters are manipulating LCs to launder money. Already, the world economy has bounced back as the war situation has calmed.

Kumkum Sultana, Director (Textile) of EPB, told The Daily Messenger, “EPB has no interest in publishing fake data showing higher exports. In fact, we are analyzing the data issued by the Custom Office against 'bills of export'. So, there is no chance to show higher figures than actual.”

BGMEA data shows that January exports were recorded at Tk 58,149 crore, February at Tk 52,533 crore, and March at Tk 50,778 crore.

On average, monthly receipts against garment exports should be Tk 53,895 crore, but BB's data shows only Tk 33,462 crore, which is Tk 20,397 crore lower than estimated.

According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), during the first ten months of the 2023-24 fiscal year, Bangladesh exported $40.49 billion worth of garment products, but the central bank's reserve fell to $19.97 billion as of April. In the last fiscal year, exports were recorded at $46.99 billion.

Messenger/Disha