Bicycle exports on the decline
Bicycle exports from Bangladesh declined year-on-year in the first four months of the current fiscal year apparently for shrinking demand in Europe propagated by the war-induced cost-of-living crisis.
Around $48.38 million worth of two-wheelers were shipped during the four-month period of 2022-23, down 9.54 per cent from that in the same period last year, according to data from the Export Promotion Bureau.
Export growth declined by 4.26 per cent in the July-September period.
"It is a major impact as the global economy continues to be weakened due to the Russia-Ukraine war, with disruptions to trade and shocks to food and fuel prices continuing," said Md Luthful Bari, director for operations at the Meghna Group of Companies, the country's biggest bicycle exporter.
He apprehends that the exports would go down in the coming days due to higher inflation and subsequent tightening of global financing conditions.
Around $48.38 million worth of two-wheelers were shipped during the four-month period of 2022-23, down 9.54 per cent from that in the same period last year, according to data from the Export Promotion Bureau.
Overall export is decelerating as Europeans are finding it difficult to make a living amid rising consumer prices.
For example, nearly three-quarters of European consumers are cutting back spending on everyday items, including food, to make ends meet amid a worsening cost-of-living crisis, according to IRI, a data analytics and market research company.
Bangladesh mainly exports bicycles to Germany where demand has reduced significantly due to ongoing economic pressure, Bari said.
According to the secretary to the Bangladesh Bicycle and Parts Manufacturers' and Exporters' Association, export orders declined by around 20 per cent compared to that last year while some were even cancelled as retailers declined to make purchases for the low demand.
At the same time, production costs have increased significantly due to the ongoing crisis of gas and power.
"We have to spend around Tk 30 for the generation of every unit of power using diesel, which is a direct threefold increase in the cost of energy," he said.
A downturn in bicycle exports had been prevalent since 2014-15. However, demand started recovering following the Covid-19 outbreak in 2020.
But the present global economic crisis is posing new challenges.
Kamruzzaman Kamal, director for marketing of Pran-RFL Group, said the impact of the Russia-Ukraine war on the export of bicycles was not immediate. Rather, it gathered momentum in July and August.
"We delivered bicycles against previous orders up until June. Export orders started declining since July," he said.
Kamal thinks it is clear that the export of bicycles would decline continuously until the global economic uncertainty ends.
RFL has the capacity to manufacture nine lakh bicycles per year and of them, a third is exported to European markets.
"Exporters need to explore new destinations to expand the market and the government should provide assistance to the exporters," said Kamal.
Export opportunities and development of the domestic manufacturing facilities have helped directly generate at least 7,000 jobs.
"Against this backdrop, they need policy support to expand exports," added Kamal.
The pandemic triggered demand for bicycles worldwide, increasing exports from Bangladesh.
Bicycle shipment fetched $167.95 million for Bangladesh in the last fiscal year, up from $130 million in 2020-21, data from the EPB showed.
According to Eurostat data, Bangladesh is currently the third largest bicycle exporter to the European Union and the eighth largest in the world.
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