Bangladesh imports over 50% cotton from Africa

Indian cotton gradually losing Bangladesh market

Badrul Alam

Bonik Barta graph

Readymade garments (RMG) account for a staggering 85 percent of Bangladesh’s total exports. The textile sector of the country provides all the raw materials to the export-oriented industry. Most of the materials produced in the mills and factories are cotton products. Therefore, cotton can be described as the main component of the huge industrial activities. However, Bangladesh produces a negligible amount of cotton. As a result, the country has to rely on imports of this all important product.

Currently, the yearly demand of cotton stands at more or less 8.5 million bales (1 bale equals to roughly 218 kilograms). Despite purchasing cotton from different countries, the country was dependent on India for cotton imports for a long time. There has been a change in the source with the time. Within four to five years, Africans countries have taken over India. At present, more than 50 percent of the cotton Bangladesh needs is coming from the African countries.

According to people concerned, Islamic Development Bank (IDB), a financial institution based in Saudi Arabian city of Jeddah, is playing a key role in Africa’s cotton trade. With the loans from IDB, the cotton exporters from Africa set up warehouses at Port Klang in Malaysia. Bangladeshi importers can bring cotton from there as per their need within seven days. The advantage of using a third country port is working as the main catalyst in changing the main source of cotton for Bangladesh.

“There are different complexities in storing cotton in the country. Interest rates spike in the inventory. Therefore, warehouses situated in a third country port are used,” Bangladesh Textile Mills Association (BTMA) President Mohammad Ali Khokon told Bonik Barta.

“Many of the African cotton exporters have warehouses in Malaysia’s Port Klang. They store cotton in accordance with the demand of the Bangladeshi importers. And, the required cotton can be brought home within seven days. The imports of cotton from Africa are on the rise mainly due to this facility,” he said.      

United States Department of Agriculture (USDA) keeps the yearly (August-July) account of Bangladesh’s cotton imports. Based on information from Bangladesh’s National Board of Revenue (NBR), USDA states, in 2022-23 fiscal year, Bangladesh imported maximum amount of cotton from Western Africa. During this period, 39 percent of the total demand was brought from this region. Cameroon provided 9 percent while Chad sold 3 percent. So, in total, 51 percent was imported from the countries in Africa. Besides, 16 percent was imported from Brazil, 12 percent from neighboring India and 10 percent was imported from the US.        

People involved in the textile sector say that the quality of African cotton is quite good. Aside from the quality, the prices of African cotton are competitive and it takes less time to import. These are the reasons cotton imports from Africa are going up.

“Among the African countries, the quality of cotton from Cameroon is very good followed by Chad and Mali. But, one of the main reasons behind the increase of cotton exports is African Cotton Association. Members of the organization get special financial assistance from IDB enabling them to export good quality cotton at competitive prices and in a short period of time. And, Bangladeshi mill owners are able to take this advantage,” said BTMA President Khokon.       

Africa was not always the source of cotton for Bangladesh. Once upon a time, cotton from Uzbekistan was quite popular. But, Bangladesh had to move away from the Central Asian country after it was accused of allowing child labor. Considering the prices and shipment time, India was a very important source for relatively long time albeit the quality of Indian cotton-related yarn and fabric was questionable. Besides, the neighboring country would impose non-tariff barriers like export ban to meet its own demand. Owing to these bottlenecks, the demand of African cotton has gradually gone up in Bangladesh.

According to BTMA information, Bangladesh exported 5.2 million bales of cotton in 2010.  Of it, over 1.1 million bales came from India which was 22 percent of the total imports. In 2015, a total of 6.1 million bales were imported, including 2.9 billion bales from India. Indian cotton amounted to nearly 55 percent in the following year. Currently, cotton imports from India slumped to 12 percent.     

Even before the Covid era, India was a major source of cotton for Bangladeshi importers. As per Bangladesh Bank statistics, the country imported 25 percent of its cotton from India alone in 2019-20 marketing year. Apart from it, 10 percent came from US and 9 percent from Australia. Besides, 8 percent was imported from African country of Benin and 16 percent came from Burkina Faso and Mali – two African nations. Ivory Coast and Cameroon exported 5 percent each. In total, nearly one-third of Bangladesh’s cotton imports in that marketing year came from African regions.

India was a large source even after Covid-19 pandemic. A USDA report based on NBR statistics shows that 24 percent of Bangladesh’s cotton imports were from India in 2022. Benin exported 16 percent, Brazil 14 percent, Burkina Faso 10 percent and Cameroon sold 7 percent. Bangladesh imported 8 percent of its cotton in that year from US.   

“Bangladesh produces yarn from good quality cotton. This is why cotton imports from Africa and America are on the rise,” Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Executive President Mohammad Hatem told Bonik Barta.

“This also means that the country is producing yarn using cotton that is better than the Indian one. Bangladesh exports worldwide the garments produced from these yarn and fabric,” he added.

Hatem also said, “Aside from ensuring the quality, uninterrupted supply is also a major cause for changing the sources for cotton imports. Majority of the cotton produced in China and India is used for local consumption. As a result, India used to ban cotton exports often interrupting trade. Bangladesh had to face this trade barrier regularly.”       

Bangladeshi yarn and fabric producers claim that the quality of Indian cotton was never satisfactory. If standards are taken into consideration, Australian cotton comes first followed by US and Africa. Indian cotton will be at number six or seven. Currently, apart from Eastern and Western African countries, cotton is also imported from Brazil, Australia and US. The quality of yarn depends on the quality of cotton. Garments are made accordingly. Cotton from US, Brazil and Africa is required in case of high-end garments. If there is a demand of Indian cotton it is only for local market.

According to member entities of Bangladesh Cotton Association (BCA), there is not much difference in prices between Indian and African cotton. Although far away, importance is given to African cotton rather than from neighboring India only considering the quality. Besides, the Indian companies do not live up to their pledges most of the time. Also, there are problems in manufactured yarn and fabric due to low quality cotton. The dependency on Indian cotton decreased to avoid these issues.

BCA President Mehdi Ali said, “Two decades ago, Bangladesh used to import more cotton from US. After that, the importers started to import from India taking the shipment time and cost into consideration. There is a demand for good cotton produced in Gujarat and Orissa. If the quality was maintained and promises were kept, India still would have been the main source of cotton for Bangladesh.”

He also said, “From time to time, there was divergence between Bangladesh’s garment exporters and Indian cotton exporters with regard to certificates. Dishonesty of India in cotton trade is not seen in other source countries.”

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