Business

Russia-Ukraine War Impacts Bangladesh RMG Exports

Bangladesh RMG exporters are facing hurdles with shipments to and payments from Russia declining, due to the ongoing Russia-Ukraine war. Many garment suppliers are not receiving export receipts as several Russian banks have been banned from using SWIFT, the global payments messaging network. Around 150 apparel exporters from Bangladesh have been keenly tapping the emerging Russian market. Bilateral trade between Bangladesh and Russia is worth more than US$ 1 billion and growing. Many exporters say their goods are stuck at Chattogram port as shipping lines are not ready to take the goods on board. Others have reported that their documents have been sent back from Hungary due to the SWIFT ban. While orders were on the manufacturing lines, Russian buyers have now asked to delay the shipments, even as garment exporters have invested and imported raw materials and other inputs. Some fear their loans turning bad as these are huge investments which have gotten stuck. Some 20% out of nearly US$ 600 million garments shipped from Bangladesh directly goes to Russia and the rest through third countries such as Turkey, Poland, Hong Kong and some other European nations. Bangladesh Bank has advised garment exporters to do business with Russia through third countries and transact with the Russian banks that are not facing the SWIFT ban. The BKMEA has advised that exporters send scanned documents to buyers until international courier companies resume carrying them to Russia. It is learnt that some Russian buyers are asking for using the Chinese alternative to SWIFT. Another option is for local exporters to send goods to Russia through the ports of Finland, Hamburg and Belarus as sea routes are still open for local exporters. The Bangladesh Garment Manufacturers and Exporters Association has opened a helpdesk to address Russia related trade issues. In the July-January period of the current fiscal year, suppliers sent garment items worth US$ 415.47 million to Russia, registering a 36.47% year-on-year growth, data from the Export Promotion Bureau showed. In the last fiscal year, Bangladesh exported apparel items worth US$ 593.66 million. Of the sum, US$ 373.25 million was knitwear products and US$ 220.41 million was woven items.