A drastic reduction in prices of cotton, yarn and fabrics has slowed down export growth. As the prices of raw materials are low, the products have become cheaper and the buyers now pay less for their garment purchase.

According to Export Promotion Bureau (EPB) statistics, overall exports grew by only 2.4% in December 2011 compared to the same month in the previous year. The growth was 15% in November and 2.29% in October. But the fiscal 2011-12 started with a high hope -- 28.7% growth in export in July, the first month of the year, and 32.4% in August.

The prices of raw materials such as cotton, yarn and fabrics have come down by 50%-60% now from that of January this year. The price of widely consumed 30-count yarn has come down to $3.2 a kg now from $5.5 in January, said Mahmud Hasan Khan, Managing Director of Rising Group.

Exports of knitwear and woven, which account for the country's two-third of $22.93 billion export earnings per year, lag behind the strategic export target for July-December this fiscal year.

Bangladesh's knitwear export was $3.99 billion during July-December of 2011-12, down by $105 million than the target for the same period. Similarly, woven export was less by $66 million than the target.

Mustafizur Rahman, Executive Director of Centre for Policy Dialogue (CPD), said this year's export growth in terms of value would show a downtrend due to a sharp fall in the prices of raw materials. He said the prices of cotton and yarn were 60% up last year than their present value. Still he sees challenges for Bangladesh's exports due to the global economic situation.

The analysis found 10 major export sectors that earned $22.18 billion or about 97% of Bangladesh's $22.93 billion worth of exports in fiscal 2010-11 is combined lagging behind the target so far this fiscal year.