Home ›› 07 Apr 2022 ›› Front
Bangladesh has been continuing its export of readymade garments (RMG) to Russia through third countries due to major trade sanctions in place on the latter following its invasion of Ukraine.
The Russia-Ukraine war came at a time when businesses were recovering from the pandemic-induced slowdown on the back of the increased volume of orders from international buyers.
Many exporters have either already produced the finished items for the Russian buyers or sent the goods to the Chattogram port to be shipped.
Some 20 per cent out of nearly $600 million in garment items shipped from Bangladesh directly goes to Russia and the rest through third countries such as Turkey, Poland, Hong Kong and some other European nations.
However, all is not well as payments have become uncertain because of the sanctions imposed by the US, European Union, UK, Japan and Australia on several Russian banks. Exporters are now concerned about how they will get back the payments for the products they have already shipped and what will be the fate of orders, which are in the process.
Previously, Bangladesh received the payment through Singapore and United Arab Emirates (UAE). But now only the UAE is acting as a payment gateway.
Besides, Bangladesh used to export RMG goods to Russia through Singapore and Colombo port but after Singapore ban Russian-bound vessels, only Colombo port is now open for export.
Only selective Chinese and Russian vessels are now carrying goods to Russia, creating a freight crisis.
“Russian buyers are looking for alternative ways of receiving the goods. Although it’s costlier they are now receiving goods from Poland port. They assured us we will get paid on time,” Helal Uddin Ahmed, managing director of Fashion Flash told The Business Post.
Bilateral trade between Bangladesh and Russia is worth more than $1 billion and is growing, according to industry insiders.
In the July-January period of the current fiscal year, suppliers sent garment items worth $415.47 million to Russia, registering a 36.47 per cent year-on-year growth, data from the Export Promotion Bureau showed.
Recently, the Bangladesh Bank advised RMG exporters to do business with Russia through third countries and transact with the Russian banks that are not facing the SWIFT ban.
The Bangladesh Garment Manufacturers and Exporters Association has also opened a desk to help all types of apparel exporters inform it about orders received, executed and payments unpaid.
