The country, which plays an important role in apparel exports second only to China, is expected to import 80 lakh bales of raw cotton, as projected by the United States Department of Agriculture (USDA).
Bangladesh is expected to import 80 lakh bales of raw cotton in marketing year (MY) 2024-25, according to the United States Department of Agriculture (USDA). This is a 6.7% increase over MY 2023-24. A report by the USDA's Foreign Agricultural Service said that Bangladesh's garment industry is expected to increase exports by 7 to 10 percent by 2024.
This forecast reflects a notable 6.7% increase over MY 2023-24, which began in August, for cotton imports, as outlined in USDA's comprehensive report on production, imports and use of cotton. cotton use in Bangladesh.
The report highlights expectations for increased use of raw cotton by local spinning mills, due to reduced yarn and fabric imports.
USDA's Foreign Agricultural Service emphasized the optimistic outlook for Bangladesh's garment industry, predicting potential export growth of 7 to 10 percent in 2024, rebounding from previous declines amid an economic backdrop. global economic stagnation.
Ready-made garment (RMG) exports in the first months of 2024 have shown strong growth, reaching USD 9.47 billion with a year-on-year increase of 13.2%, expected trend will continue until MY25, thereby boosting raw cotton imports.
Furthermore, the report highlights the impact of dwindling foreign exchange reserves, which is likely to spur increased cotton consumption and a shift away from purchases of more expensive fabrics.
Notably, many garment factories in Bangladesh own spinning factories, choosing to import raw cotton instead of importing yarn.
These vertically integrated companies, driven by income from apparel exports, have the ability to originate letters of credit (LC) thanks to direct access to the US dollar.
In contrast, units that depend solely on yarn and fabric imports face foreign exchange challenges, often finding it difficult to initiate LCs, thereby reducing their import capacity.
Meanwhile, industry insiders predict global RMG demand will skyrocket after April 2024, potentially boosting cotton consumption in Bangladesh further.
Fiber2 Fashion News Desk (DR)
