Export and import of Bangladesh

The economy of Bangladesh is in a stable position because of the export sector. Ready-made garments and knitwear have the highest contribution to the exports of this country.

Export and import of Bangladesh

In July 2020, the total foreign currency reserve of Bangladesh Bank is $32093.3 million.

The total import in 2018-19 is worth $56061 million. The total exports in 2018-19 is worth $40535.04 million and in 2019-20 the total earning from exporting products is $33674.09 million.

Characteristics of international trade of Bangladesh/Export and import of Bangladesh

1. Export raw materials: The main characteristic of Bangladeshi export is export raw materials. As an agricultural country, this country exports rawhide, jute, tea, fish, and some other products.
2. Import industrialized products: Bangladesh is underdeveloped in the industry. So, the main import items of this country are iron, medicines, chemical products, and machinery.
3. Import crops: Every year this country imports 15 to 20 lakh tons of crops and related products.
4. The unequal balance of trade: In Bangladesh, the total amount of export is higher than the total imports. So, the international balance of trade remains unequal.
5. Port-based trade: Most of the international trade of this country occurs using water transport. About 85% to 90% of foreign trade occurs on Chattogram and Mangla seaport. Bangladesh can perform road transport only with India, Myanmar, Nepal, and Bhutan.
6. Trade with few countries: Bangladesh has foreign trade only with few countries. Those are China, the USA, the UK, Russia, Japan, Germany, Saudi Arabia, etc.
7. Luxury goods: The government of Bangladesh has reduced the imports of luxury goods to accelerate its economic development.
8. Export manpower: This country earns huge remittance by exporting manpower in different countries. This increases foreign employment and remittances to BD. Most migrant worker’s destination countries in recent days are Saudi Arabia, UAE, USA, Japan, South Korea, etc.
9. Terms of trade: Importing and exporting countries provide some terms and conditions to this country. Those terms and conditions are adverse to this country’s economic development.
10. Liberal trade policy: Bangladesh are following a liberal trade policy on international trade according to a free-market economy.
11. Wage-earners scheme: Bangladesh has started wage earners scheme to facilitate the migrant workers. So, this country is able to import products using this money.

Export of Bangladesh

In the fiscal year, this country earns about 95% of its total export from eight different sectors of products. The total earning of those sectors is worth $31,999.18 million.

Those sectors of products are agricultural goods, frozen food, home textile, knitwear, oven cloths, jute and jute products, rawhide and its products, and engineering products.

In 2019-20 export of some products has increased and export decreased on some products.

The products whose export increases in 2019-20 are jute and jute products, fruits, vegetables, tobacco, team carpet, furniture, medicine, handicrafts etc.

Export reducing products on 2019-20 are oven cloth, prawn, dry food, ceramics, rawhide and leather products, home textile, electric products, plastics and its products, agricultural products, rubber, etc.

Bangladesh Export Data and Growth

Export sector	2018-19 ($ in million)	2019-20 ($ in million)	% of increase/ decrease
Primary products	1409.37	1318.21	-6.47
Industrial Products	39125.68	32355.88	-17.30
Total	40535.04	33674.09	-16.93

Major Export products of Bangladesh

Bangladeshi export sector is divided into two segment.

Those are, (a) traditional sector and (b) non-traditional sector.

Traditional sector includes raw jute, jute products, tea, raw hide and its products, frozen food, newsprint etc.

 Non-traditional sector includes cloths, handicrafts, fruits, vegetables etc.

Traditional sector

1. Raw jute & its products: Bangladesh is the top jute growing country in the world. Every year it produces 50-60 lakh bales of jute which are 75 percent of total jute in the world. In 2019-20 the total earning from exporting raw jute is $100.52 million and its total share on export is 2.62%. Jute and its products have a great impact on the economy of Bangladesh. This country exports Jute in the USA, UK, Russia, Japan, Pakistan, Germany, India, etc.
2. Rawhide & its products, shoe: Bangladesh abounds in cow, buffalo, and goat. So, this nation is exporting rawhide and its products. Bangladesh exports these items to the USA, UK, Italy, Japan, Germany, France, India, Belgium, etc. in 2019-20, Its share in the total export is 2.37 percent which is worth $797.60 million.
3. Fish: This country mainly exports frozen fish. By exporting prawn it earns huge foreign currency. It export fish item to the USA, UK, China, Singapore, India, Italy, Germany, etc. the total earning from this sector is $456.15 and the total share of export is 1.35 percent.
4. Tea: Every year Bangladesh produces 32 million tons of tea. After meeting domestic needs this country exports tea to the USA, UK, Germany, Russia, Italy, Japan, Pakistan, Turkey, Egypt, etc.
5. Paper and newsprint: Karnofuli newspaper mill and Khulna newsprint mill produces huge paper, newsprint, and hardboard. This country exports those products to India, Pakistan, Sri Lanka, and the Middle East.

1. Knit clothes: In the fiscal year2019-20 this sector earns $13,908 million which is 41.30% of the total export of this country. The cloth of this country has a huge demand for abroad. This country exports cloth to the USA, UK, and the Middle East, etc.
2. Woven cloths: Oven cloth is the highest-earning exporting cloth of this country. Its share of total export is 41.70% and it is worth $14,041.19 million. Its exporting destination is the same as knit cloth.
3. Home textiles: In 2019-20, the total earning from this sector is $758.91 million. which is 2.25 percent of total export.
4. Handicrafts: Bangladeshi people are able to make handicrafts using wood, bamboo, coconut, jute, etc. those have a huge demand for abroad. This country earns more than six million dollars by this sector.
5. Other products: In the 2019-20 fiscal year, besides those products, this country also exports Pharmaceuticals ($135.75m), plastics ($100.51m), bi-cycle ($82.84m), tobacco, electronics, books, toys, film, etc.

Data of top Export items of Bangladesh

Country-wise export from Bangladesh

The total export to top four countries is worth $26,731.91 million and it is 79.38 percent of the total export of Bangladesh.

 The top exporting destination of Bangladeshi products is European Union. In 2019-20 total export to that area of Bangladesh is worth $18,698.25 million and its total market share is 55.53 percent.

The total export of other three countries are USA $5,832.39 million (17.31%), Japan $1200.78 million, and Canada $ 1,000.49 million.

Problems of export from Bangladesh

Bangladeshi export depends on a few products. The total contribution of ready-made garments on export is 85.25% in 2019-20. Here is a discussion on the problems of the export trade of Bangladesh.

1. Discover an alternative to jute: Jute was one of the top exporting items of Bangladesh. But the invention of synthetic and artificial fiber has reduced the use of jute and its product. 
2. Lack of product diversity: Bangladesh exports only a few products like jute, tea, leather, clothes, etc. This country has a few product variations and it is unable to add new export items. Depend on product variety is the most important problem in this country.
3. Nature of export items: Most of the exporting items of this country are raw material and agricultural products. This country faces a problem in filling international demand. So, it hampers its foreign trade.
4. Price fluctuation: Most of the exporting products of Bangladesh are depends on nature. So, it is impossible to control the production of those products when their price level touches the bottom.
5. Low quality: Some products of our country fails to match international quality. So, it is very hard to compete with other countries.
6. Transportation problem: About 90% of Bangladeshi transport occurs using the water transport system. But this country doesn’t have sufficient steamer. So they have to rent them and the profit margin reduces.
7. Production cost: Every year the production price of exporting products is increasing. It creates problems with increasing exports.
8. Publicity: There needs huge publicity, advertisement, the exhibition of products to increase exports. But there are not enough business missions.
9. Smuggling: Smugglers are smuggling our export items. It reduces our total exports. 
10. Storage: This country doesn’t have enough storage system to store its export items. So, they are bound to sell products at a low price.
11. Trade association: Some countries of the world have created trade associations like the EU. Bangladesh is facing difficulties to export to those countries.

Measures to increase export of Bangladesh

1. Industrialization: This nation must set up more and more industries to produce export related products. Then, the export will boost.
2. Increase production: Bangladesh has to increase the production of jute, tea, leather, and cloths to accelerate its export.
3. Reduce production cost: To compete with others abroad, reduction of production cost is necessary. If production expenditure reduces, the price level will reduce and the demand for that product will increase.
4. Improve quality: Some of the products, we want to export are below the international quality benchmark. We have to improve the quality of all the products.
5. Reduce internal consumption: If the people reduce the consumption of export items; there will be a surplus of those products. We can export them.
6. Classification of products: If we want to increase the export, we have to classify all products. Consumers or buyers will get a clear message when they see a product of that division.
7. Reduce export duty: Government can reduce the duty of export items. Thus the product will get cheaper to international consumers.
8. Publicity: Mass publicity can increase the demand for a product. We have to participate in the international trade fair, product exhibition, and use international media to promote our products.
9. Improve transportation system: Improvement of transportation cost reduce the cost of export. It helps to export products at a low cost.
10. Trade agreement: Government should sign a trade agreement with other countries. The Bangladeshi government has signed a trade agreement with some countries.
11. Control smuggling: Smuggling hinders our countries export. Stopping smuggling can boost our countries export.
12. Storage: Most of the agriculture items are perishable. There must have enough warehouse for our exporting items because we harvest those items on seasons only.
13. Stable price level: Fluctuation of price level can reduce the number of export items. So, a stable price level is necessary.

Steps were taken by the government to improve exports

In every fiscal year, the government provides incentive packages to exporters and producers.

1. Reduce complicity:  Bangladesh textile mills association members can withdraw loans only with LIBOR+ 2.5% interest.
2. Export development fund: The government increases the total amount of export development fund from $300 million to $400 million.
3. Discover new export destinations and add new products: The government provides incentives to new export items and to discover new export destinations.
4. Reduce service charge: Bangladesh Bank published a circular and gave directions to other banks to reduce service charges and fees.
5. Increase loan amount: The government increases the loan amount of a single importer to $10 million from three different banks.
6. Cooperation of government and BTMA: The government helps BTMA to establish a national institute of textile training, research, and design (NITTRAD).
7. Promote shipbuilding: Shipbuilding is a potential sector of this country. To encourage this sector government provides 5% incentives.
8. Give facility to small entrepreneurs: This country provides special facilities to small entrepreneurs.
9. Others: The government also provides facilities on the frozen food sector, IT sector, jute, and its items, etc.

Import of Bangladesh

In the fiscal year 2018-19, the total imports of Bangladesh are worth $56,061 million with imports of EPZ. Without the import of EPZ, it is $52187.3 million.

The total import was 52,940 million with imports of EPZ in the previous fiscal year. This is showing that imports are increasing rapidly every year.

Import products of Bangladesh

As a developing country, Bangladesh imports huge products. Although it is an agriculture-related country, it is not self-sufficient in it. It has to import crops. This country is underdeveloped in the industry. So, it imports raw materials, machinery, etc.

Category-wise imported product list of Bangladesh

Commodities	2016-17 (million USD)	2017-18 (million USD)	2018-19 (million USD)
Rice	76	1746	124
Wheat	1031	1227	1148
Milk & Cream	252	288	336
Spices	259	288	315
Oil seeds	413	509	653
Edible oil	1495	1761	1718
Pulses all kinds	589	406	411
Sugar	841	951	647
Clinker	476	518	716
Crude Petroleum	533	554	930
POL	2776	4145	5731
Chemical	1870	2136	2222
Pharmaceutical products	147	152	146
Fertilizer	727	870	1120
Dying, tanning etc. materials	561	618	693
Raw cotton	2612	2949	2932
Yarn	1666	1907	2113
Textile & articles thereof	4140	4567	4985
Plastic and Rubber	1937	2163	2383
Staple Fibre	611	691	811
Iron, Steel & other metal	3269	3827	4325
Capital Machinery	3618	4585	5147
Others	10545	12526	12785
Sub Total	40444	49384	52391
EPZ Imports	3097	3556	3669
Total	43541	52940	56061

The import items of Bangladesh is divided into three categories. Those are- (1) Consumer goods and essential items (2) Raw materials of industry (3) Capital products.

1. Consumer goods and essential items: Bangladesh spends huge money by importing the necessary commodities. Bangladesh imports mainly food grains like rice, wheat, soya bean, edible oil, etc. This country also imports some necessary items like cloth, medicine, pesticide, fertilizer, electronic products, chemical products, bus, truck, cigarette, etc.
2. Raw materials of the industry: Bangladesh imports input and raw materials of industries like cotton, yarn, rubber, dye, tobacco, cement, diesel, steel, iron, minerals, etc. Those are 25% of the total imports.
3. Capital goods: Those are the machinery of industry, the machinery of agriculture, parts of machinery, railway engine and wagon, water pump, tractor, engine, battery, etc.

Country-wise expenditures on import

In the list of importing countries of Bangladesh China is in the top position. About 26.1% of imported products come from China which is worth $13638.8 million. India is in the 2^nd position and its market share is 14.7% and which is worth $64153.7 million.

Here is a table of countries from which Bangladesh export from

Country	Taka (Crore)	USD ($) in million	percentage of total
China	114593.5	13638.8	26.1
India	64253.7	7647.5	14.7
Singapore	26098.3	3105.7	6.0
Indonesia	16305.3	1940.3	3.7
Japan	15517.4	1846.3	3.5
USA	14930.9	1776.6	3.4
Malaysia	12572.4	1496.0	2.9
Brazil	11787.7	1402.4	2.7
South Korea	11047.2	1314.7	2.5
UAE	10278.6	1222.6	2.3
Germany	9202.4	1095.8	2.1
Qatar	8837.3	1050.5	2.0
Saudi Arabia	8373.5	996.7	1.9
Taiwan	8196.7	974.8	1.9
Thailand	8042.4	957.1	1.8
Kuwait	7027.9	836.5	1.6
Russia	5486.6	653.1	1.3
Australia	5013.8	596.7	1.1
Canada	4956.5	589.5	1.1
Italy	4925.2	586.1	1.1
Other Countries	71093.2	8459.6	16.3
Total	438540.5	52187.3	100.0

Role of foreign trade in the economy of Bangladesh

1. Import necessary items: Developing countries like Bangladesh have a shortage of necessary items. By international trade, this country imports food, medicine, etc.
2. Export surplus products: By fulfill domestic demand, this country exports its surplus products. Bangladesh abounds with jute, tea, leather, tobacco, etc. this country exports those excess agricultural products and earns foreign currency.
3. Import machinery and raw materials: There needs huge machinery in the industry and agriculture sector. Bangladesh imports those machinery and its parts from abroad. This nation also imports pesticides, hybrid seeds, fertilizers, etc.
4. Proper use of natural resources: By international trade, we can improve technical knowledge, make capitals dynamic, and import new technologies. We can have the best use of our natural resources and export them.
5. Capitals: It is easier to collect foreign investment by international trade. Bangladesh also can accrue foreign currency by export products and invest them.
6. Emergency situations: By international trade, one nation can fight with emergency situations. In the case of natural calamities, one nation can easily import food, medicine, and other essential items.
7. Disperse market of native products: This country earns huge foreign currency by exporting its domestic products. A small help to those sectors will flourish their export. This will create international demand.
8. Foreign aid: Depend on foreign aid will have a negative effect in the long term. This country must increase export to reduce the dependence on foreign aid.
9. Import technologies: Technical knowledge and the latest technology are a must for a countries economic development. Bangladesh imports those from developed countries and improving its economic condition.
10. Earn foreign currency: Foreign currency is necessary to make a countries development and import products from abroad. Foreign currency will accelerate a countries economic development.
11. Improve skills: In international trade, there is a competition between countries. So, every country tries’ to improve their skill and improve product quality.