Readymade garment exporters concerned by Russian invasion of Ukraine

Under orders from the Russian president Vladimir Putin, Russian troops have begun the invasion of two rebel-controlled regions in Ukraine. Following tensions for quite a few days, early on Thursday morning Russia launched land, air and sea attacks. The Russian invasion of Ukraine has caused anxiety for Bangladesh's exporters, particularly in the readymade garment sector.

A number of businesspersons in the RMG sector have said that the European Union (EU), the US, Canada and UK are a large market for Bangladesh's readymade garments. RMG export to Ukraine is relatively less and the Russian market is medium sized. A war will naturally affect exports to these two markets.

They further said a few exporters will face losses because of this. However, if Ukraine's neighbouring EU countries get involved in the war, this will have a serious negative impact on the entire RMG industry because the destination of 60 to 61 per cent of Bangladesh's garments is the EU countries.

According to the Export Promotion Bureau (EPB), Bangladesh exports readymade garments worth 31.45 billion dollars (3,145 crore dollars) in the 2020-21 fiscal. Of this, 590 million dollars (59 crore dollars) worth garments were exported to Russia, equivalent to Tk 50.79 billion (Tk 5,079 crore) in local currency. And garments worth 11.70 million dollars (1crore 17 lakh dollars) were exported to Ukraine, equivalent to Tk 1 billion (Tk 100 crore ) in local currency.

Former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Fazlul Hoque, speaking to Prothom Alo, said, "War is never good news. Already the price of unrefined oil has crossed 100 dollars. This will have a negative impact of all products including readymade garments."

He said while the war didn't have a direct impact on garment exports as yet, they were worried about the Russian invasion of Ukraine. If the war spreads to the neighbouring countries, then exports will be extensively harmed. After all, big markets like Germany and Poland are right next to Ukraine.

Ukraine's army has suspended all port activities in the country after the start of Russia's land and sea invasion. This has created increasing worries over exports of this country which is the highest exporter of food grains. Russia has already suspended the movement of commercial vessels on the Azov Sea that lies between Russia and Ukraine, according to CNN.

In the meantime, Bangladesh's RMG sector has overcome the impact of the Covid-19 outbreak significantly well. In the first seven months (July-January) of the current fiscal, garments worth 23.98 billion dollars (2,398 crore dollars) were exported. This is 30 per cent higher than the corresponding period of the previous year.

Exports to Russia are also increasing. In the first seven months of the current fiscal, garments worth 410 million dollars (41 crore dollars) were exported to the country. This is a 40 per cent increase from the corresponding period of the previous year.

RMG export to Ukraine had been increasing too. In the first seven months of this fiscal, RMG exports to Ukraine has been 7.9 million dollars (79 lakh dollars). Last year in the corresponding period this has been 6.9 million dollars (69 lakh dollars).

Other than readymade garments, Bangladesh exports plastic, shoes, leather, ceramics, toys, mattresses, frozen food, jute, etc, to Russia. And to Ukraine, other than readymade garments, Bangladesh also exports medicines, plastic, shoes, mattresses, toys, etc.

Vice-president of Bangladesh Readymade Garments Manufacturers and Exporters Association (BGMEA), Shahidullah Azim, told Prothom Alo that the Russian market for readymade garments is around 40 billion dollars (4000 crore dollars).

"All sorts of initiatives had been taken up to increase our share in the market," he said, adding that this would be affected to an extent by the present situation.

* This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Ayesha Kabir