Export potential in China market remains untapped for pandemic
Despite the duty-free market access for 97 per cent goods, Bangladesh could not seize the opportunity for most of last year because of a lack of diversified goods and the fallouts of the coronavirus pandemic. Beijing extended the duty-free access to 97 per cent of Bangladeshi goods in July last year, bringing 8,256 products under the tariff-free regime. Shipment to China stood at $566.15 million in 2020, according to data from the Export Promotion Bureau (EPB). It was $238.77 million in the January-June period and rose to $327.38 million in the second half. Every year, China imports $2.1 trillion worth of goods from all over the world and the amount is expected to double within the next seven to 10 years. The duty benefit was extended to Bangladesh at a time when China’s consumer market is set to expand by 12 per cent every year to reach $8.4 trillion by 2022. Studies suggest that because of its vast population, the Chinese consumer market will overtake America’s by 2034. In 2000, China contributed 7 per cent to the annual growth in consumer spending worldwide. By 2040, China will contribute 44 per cent of the global figure, which is 3.5 times the expected contribution of the US, and 2.7 times the combined contribution of the whole of the rest of Asia, according to Oxford Economics, a research firm. exports to China from Bangladesh were $746.2 million in the fiscal year of 2013-14. The amount reached to its highest level of $949.41 million in 2016-17. It dropped to $694.97 million in 2017-18. The export of garment, the main items going to China, is still very slow although it is growing. In 2008-09, Bangladesh shipped $9.49 million worth of garment to China. It rose to $506.51 million in 2018-19. Annual average growth of garment export to China was 48.85 per cent between 2008-09 to 2018-19. It fell in 2019-20 due to the pandemic as export came down to $330 million, according to data from Bangladesh Garment Manufacturers and Exporters Association (BGMEA). It imported $10.84 billion worth of textile and textile articles in 2018-19. China’s share was 46.31 per cent, or $5.02 billion, BGMEA data showed. Only for cotton, the country brought in $2.2 billion worth of the raw material from China, which 31.84 per cent of the total of $6.9 billion.
Insurance leads stocks’ gain
Insurance stocks led the capital market yesterday thanks to a regulatory order to abide by rules, including maintaining the minimum paid-up capital requirement. The DSEX, the Dhaka Stock Exchange’s (DSE) benchmark index, rose 19 points, or 0.32 per cent, to 5,820 yesterday. Among the listed 49 insurance stocks, 46 advanced and the rest remained unchanged. The Insurance Development and Regulatory Authority (IDRA) issued an order on January 17 asking all insurance companies to raise sponsor shareholdings to 60 per cent and maintain a minimum paid-up capital of Tk 30 crore to 40 crore. Life insurance companies need to maintain a minimum paid-up capital of Tk 30 crore. For non-life insurers it is Tk 40 crore. The overvalued insurance sector has got more fuel to make a big jump, said a stock broker preferring anonymity. Among the top 20 on the gainers’ list, 17 were from the insurance sector. Green Delta, Agrani and Pragati nearly had no one selling their stocks and rose 10 per cent. Market capitalisation of the insurance sector increased by 9.54 per cent while that of life insurance 5.32 per cent, according to the daily market review of LankaBangla Securities. Turnover, an important indicator of the market, dropped 15 per cent to Tk 1,290 crore. Robi Axiata was the most-traded stock, worth Tk 146 crore, followed by Beximco, Summit Power, Beximco Pharmaceuticals and LankaBangla Finance. Padma Oil Company shed the most falling 7.83 per cent followed by Delta Spinners, National Bank, Dhaka Electric Supply Company (Desco) and Zeal Bangla Sugar Mills. The port city bourse also rose yesterday. The general index of Chittagong Stock Exchange, the CASPI, increased 29 points, or 0.17 per cent, to 16,896.
Jute exports on the mend
Bangladesh’s jute industry is passing exceptional times. With raw jute trade at a historic high amid scarcity resulting from low yield, export earnings are surging. However, millers said much of the growth in export receipts of jute yarn, twine, sacks and bags are the result of a price increase. The volume of shipments increased too but the extent of growth was not as much as the spike in value growth. Data from the Export Promotion Bureau (EPB) showed that export earnings from the main exportable yarn and twine soared 42 per cent year-on-year to $449 million in the July-December period of fiscal 2020-21. Similarly in case of jute sacks and bags, exporters fetched 56 per cent higher earnings to $92 million in the fiscal’s first half. Millers said sales of 100,000 bales of previous stocks of jute sacks by state-run Bangladesh Jute Mills Corporation and private mills and higher demand for new carpets in the West amid increasing stays at homes for lockdowns buoyed shipments of jute yarn. He said prices of raw jute, the key ingredient of jute yarn, almost doubled from around Tk 2,200 per maund (around 37 kilogrammes). And this is being reflected in the export receipts, he said. Citing jute yarn, which accounts for more than three-fourth of the country’s export proceeds from jute and jute goods, he said average monthly shipment from the Chattogram port was 36,704 tonnes in 2020, up 3 per cent from that in the previous year. This is the highest ever export growth in value registered by millers and exporters in recent years. Jute and jute goods exports rebounded in fiscal 2019-20 after a 20 per cent dip the previous year. The finest raw jute is trading at Tk 4,000-4,200 per maund, said millers, who doubt estimates of total jute yields citing spiralling prices. The Department of Agricultural Extension (DAE) estimates that farmers bagged 72.86 lakh bales last season after counting flood related losses.
China to become world’s largest IoT market in 2024
China will surpass the United States to become the world’s largest Internet of Things (IoT) market in 2024, according to an industrial report. China’s spending on IoT is expected to reach around US$300 billion by 2024, with the compound annual growth rate to stand at 13 percent in the next five years, data from global market research firm International Data Corporation (IDC) showed. In 2024, the country’s spending on IoT will account for 26.7 per cent of global spending in the sector, followed by the United States at 23.8 per cent and Western Europe at 23.4 percent, IDC data showed. Among the 20 industries covered in the IDC’s report, manufacturing, government and consumer IoT spending will account for more than half of the total market spending by 2024.