The United States is witnessing a decline in its cotton export market share to Bangladesh, primarily due to logistical challenges and extended shipment durations for American cotton, according to a recent report from the US Department of Agriculture (USDA).
In the marketing year 2023-24, which commenced in August, Bangladesh’s millers imported a total of 7.8 million bales of cotton, with US cotton accounting for just 9 per cent of these imports. This marks a decrease from 10 per cent in the previous year. Furthermore, during the first seven months of MY25, local importers secured only 286,056 bales from the US, representing a mere 6 per cent of total imports, down from 11 per cent during the same period the prior year.
This report comes on the heels of the Trump administration’s recent tariff increase on goods from 60 countries, including Bangladesh, which will result in a 37 per cent tariff hike on Bangladeshi exports to the US. This development has raised concerns among exporters, prompting Chief Adviser Muhammad Yunus to reach out to the US President, pledging to boost imports of US agricultural products, including cotton. The Bangladeshi Government is also working on establishing a dedicated bonded warehousing facility that would allow US cotton to enter the market duty-free.
The USDA report highlights that while many spinning mills in Bangladesh prefer US cotton for its superior quality, they often express frustration over the logistics and lengthy shipping times involved in sourcing it. Unlike US cotton, which is not sold while in transit, many cotton merchants opt to sell South American and West African cotton while it is afloat, significantly reducing delivery times. Merchants also store cotton in nearby warehouses in Malaysia, Singapore, and Sri Lanka, allowing for delivery to Bangladesh within just seven days.
As a result of these logistical advantages, West African countries and Brazil have gained significant market share in cotton exports to Bangladesh. In the first seven months of the current marketing year, West African nations supplied 1.9 million bales, accounting for 41 per cent of Bangladesh’s total imports. Brazil emerged as a major supplier, exporting 970,487 bales, or 20 per cent of the market share, followed closely by India with 887,600 bales and a 19 per cent share. Brazilian cotton is favored for its competitive pricing, availability during the harvesting season, and stable supply, along with shorter shipping periods.
Looking ahead, the USDA forecasts an increase in cotton imports by Bangladesh to 8.2 million bales in MY26, reflecting a 1.2 per cent rise year-on-year. The report notes that despite recent political instability leading to the ousting of Sheikh Hasina’s Government in August 2024, the ready-made garment (RMG) sector has shown resilience and growth. The unrest resulted in factory closures and a decline in international orders; however, with law and order now restored, international clothing brands have resumed placing orders, boosting optimism among garment exporters. As demand for cotton is expected to rise with the anticipated resurgence in work orders, the outlook for the industry remains positive.
Source: https://apparelresources.com/