Closure of the Strait of Hormuz declared, businesses in uncertainty

Following the spread of war across the Middle East, a sudden cloud of uncertainty has descended upon Bangladesh’s processed food exporters and other trading firms. In effect, it is not possible to send goods neither by sea nor by air. As a result, a paralysis has emerged on both the import and export fronts.

On Monday, Iran formally declared the closure of the Strait of Hormuz. Iranian authorities warned that any vessel attempting to pass through the strait would be set ablaze by the Revolutionary Guard and the Navy. The announcement has further complicated an already precarious situation.

Bangladesh conducts trade with seven countries—Iran, Iraq, Qatar, Kuwait, Bahrain, the United Arab Emirates (UAE) and Saudi Arabia—through the Strait of Hormuz.

According to data from Bangladesh Bank and the National Board of Revenue (NBR), during the 2024–25 financial year Bangladesh imported goods worth approximately US$6 billion from these countries. In the same period, exports to these destinations totalled around US$750 million.

Exporters state that numerous Bangladeshi firms ship ready-made garments, processed foods, vegetables, fruits, frozen fish, caps and footwear to the Middle East. If the conflict is prolonged, small and medium-sized enterprises in particular will face severe financial strain. Without a swift resolution, some factories risk closure.

After a joint strike by the United States and Israel on 28 February, Iran launched retaliatory attacks. The conflict subsequently spread to the UAE, Qatar, Kuwait, Bahrain, Oman, Saudi Arabia, Lebanon, Jordan and Iraq, among others. Most flights across the region have been suspended.

Speaking about the situation, Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), told Prothom Alo that the scale of the war has expanded considerably, spreading across the Middle East.

“It is unclear how long this conflict will continue. Already there are disruptions in imports and exports. Energy security could soon become a major concern. According to BPC (Bangladesh Petroleum Corporation) data, apart from kerosene, our stock of other fuels will last only two to four weeks. We should therefore immediately plan alternative sources for importing oil and gas,” he said.

Following Iran’s official declaration on Monday closing the Strait of Hormuz, shipping lines suspended bookings for export containers destined for eight countries in the Persian Gulf region and the broader Middle East.

Consequently, a large number of containers awaiting shipment to these destinations are stranded at private depots in Chattogram, at Chittagong Port, at Colombo Port in Sri Lanka, and at four overseas ports.

Shipping companies estimate that more than 1,000 containers are currently stuck. Some had been dispatched before the outbreak of war but have been halted en route. These containers include food products, beverages and ready-made garments.

Switzerland-based Mediterranean Shipping Company (MSC) has approximately 250 containers stranded, according to its head of operations and logistics in Bangladesh, Azmir Hossain Chowdhury. No new bookings are being accepted, he added.

Riverine Fish and Food Processing Industries, a regular exporter of frozen fish to the Middle East, typically ships around 40 containers annually to the region. Exports are presently suspended due to the conflict.

Its managing director, Mohammad Shahjahan Chowdhury, who is also president of the Bangladesh Frozen Foods Exporters Association, told Prothom Alo that at least 100 containers of frozen fish are stranded at ports and factories. A prolonged impasse could push several companies towards closure.

Pran-RFL Group, one of the country’s leading industrial conglomerates, exported goods worth US$540 million last year, of which 30–35 per cent were destined for the Middle East. The group also imports raw materials, particularly petrochemicals used in plastic production, from the region, shipments of which have now ceased.

Several consignments of Pran-RFL products are lying idle at Middle Eastern ports, unable to be cleared due to suspended port operations. Other consignments remain at sea. Meanwhile, substantial volumes of goods are stockpiled at Chittagong Port, container depots and factories.

Kamruzzaman Kamal, director (marketing) of the group, stated that 600 export containers are stranded across various Middle Eastern destinations.

“No new export orders are being placed. Imports have also stopped. We source petrochemicals from the Middle East as raw materials for plastic. Shipments of 10,000–12,000 tonnes have already been cancelled. If the war does not cease within seven to 10 days, our factory production will be disrupted,” he said.

TK Group had sent two containers of food products to a depot in Chattogram for export to Saudi Arabia. The consignments were loaded into MSC containers and scheduled to be transported via the vessel ‘SOL Promise’ to Colombo and onward to Dammam Port. However, following cancellation of the booking, the goods were unloaded and returned to the depot.

Mohammad Mustafa Haider, director of TK Group, said at least 40 of their containers are stranded. Those at depots are being unloaded. “There is now significant uncertainty surrounding these shipments,” he said.

Similarly, one container belonging to Hifs Agro Food Industries is stranded at Dubai Port. Six additional containers are adrift aboard Middle East-bound vessels. Thirteen more containers remain at four factories in Dhaka and Chattogram.

Hifs Agro Food Industries CEO Syed Muhammad Shoaib Hasan warned that no shipments are currently moving to any Middle Eastern destination, and shipping companies are not accepting new bookings. If exports are not dispatched promptly, there is a risk that products may expire.

Likewise, Chittagong Asian Apparels had loaded one container of garments last Saturday at Incontrend Depot in Chattogram for shipment to Sharjah Port in the UAE aboard the vessel ‘MSC Cheon’. Following cancellation of the booking, the garments were removed.

Eight containers of food products belonging to Pran Group’s Mymensingh Agro Limited, awaiting shipment on the same vessel, were likewise unloaded from Nemsan Container Depot in Chattogram.

Fatullah Apparels of Narayanganj shipped a consignment of garments last Saturday under a purchase order from a Saudi buyer. A further shipment was scheduled for 7 March, but the buyer has requested a temporary halt.

The factory’s managing director Fazle Shamim Ehsan observed, “Even small export orders before Eid are important to us, as we must meet workers’ wage and allowance obligations.”

Selim Raihan, executive director of the South Asian Network on Economic Modeling (SANEM), told Prothom Alo that the crisis is unlikely to be resolved swiftly.

Stating that a prolonged conflict would generate significant economic challenges, he said, “While there are stocks of oil and liquefied natural gas (LNG) for now, these will diminish in the absence of new imports. LNG prices are already rising, which could fuel inflation.”

Selim Raihan emphasised that the government should promptly engage with business leaders and economists to formulate and finalise a comprehensive response plan.