Bangladesh's exports hit a historic high of $4.73 billion in October with a 60.37 per cent year-on-year increase riding on the stunning rebound of readymade and non-readymade garment shipment.

Overall, export earnings increased 22.62 per cent to $15.74 billion in July to October, data from the state-owned Export Promotion Bureau (EPB) showed.

"The export earnings have grown from both RMG and non-RMG sides. Even, the growth in non-readymade garments is higher than in readymade garments. This is also a very good aspect in terms of export diversification," said Prof Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD).

So both the demand side and supply side have contributed to this growth.

It means that as the economy has turned around, there has been a resurgence in demand in major markets.

On the other hand, on the supply side, export-oriented industries have been able to produce uninterrupted since the lockdown.

"But having said that we should be cautious that the prices of many raw materials such as cotton, yarn and intermediate imports in the export-oriented industry have also increased in the international market. As the price of intermediate imports has increased, the net value addition in the export-oriented industry is a little less than the gross value addition."

The price of high intermediate imports is included in the price of the products that have been exported, he said.

"Though the price of intermediate imports has gone up, the price of our finished products has not gone up at that rate. So, volume-driven RMG growth is being noticed here," Rahman said.

 "There are two things in export earnings - one is the price effect and the other is the volume effect. A large part of the growth that has taken place here for the increase in volume actually is based on productivity growth."

So employment implementation did not happen that much here and the growth has not increased much in terms of profit margins and value addition, Prof Rahman said.

In addition, coronavirus has caused some disruption in production in China and Vietnam. Bangladesh has been able to take some of these two opportunities, he added.

In the first four months of the current fiscal year since July, the earnings from garment shipment were $12.62 billion, up 20.78 per cent year-on-year.

Of the sum, $7.21 billion came from the knitwear shipment, which grew 24.27 per cent. Woven garment shipment rose 16.41 per cent to $5.41 billion.

Frozen and live fish exports grew by 17.46 per cent to $225.23 million, agricultural products rose 29.34 per cent to $464.11 million, and leather and leather goods shipments were up 28.85 per cent to $364.9 million.

However, jute and jute goods export fell by 24.11 per cent to $332.98 million in the last month.

Rahman said, "While our overall exports were not doing so well, jute product exports were doing well. It is disheartening that despite its promise as an environment-friendly product jute export has demonstrated a negative growth when all other products are going good."

To sustain future growth, competitiveness must increase, he said. "In order to increase competitiveness in competition with China and India, we need to increase productivity, technology-based skills."

"Readymade garments and other export-oriented sectors need to increase product diversification. At the same time, we need to restructure our incentive structure from the perspective of technology, meaning that the factories who will enrich productivity, skills and technology will have to provide more incentives," Rahman said.

Vietnam is taking advantage of the markets that China is losing and Bangladesh also has to enter those places, he said adding, "We have to pay attention to increase non-RMG exports as light engineering, leather and footwear in regional markets."