Cotton imports from US decline for two consecutive years

Bangladesh's cotton imports from the US have seen negative growth for the last two consecutive years, a trend spinners attribute to the high price and longer lead time of US cotton compared to Indian raw materials, despite the US cotton's higher quality and lower wastage rate.

The country imported US cotton worth $252 million in 2024, a 25.51 per cent decrease from the previous year. In 2023, the country imported US cotton valued at $337 million, down from $469 million in 2022, according to data from the US Department of Commerce.

The textile and garment industry, which accounts for more than 80 per cent of Bangladesh's total export earnings, heavily depends on imported cotton. According to industry insiders, approximately 12 per cent of the cotton required by the sector is imported from the United States.

When asked, Khorshed Alam, chairman of Little Star Spinning Mills, said that US cotton is comparatively more expensive than Indian cotton, and it also takes longer to receive the US raw materials.

He, however, noted that while Indian cotton is cheaper, it comes with a higher rate of wastage. On the other hand, it takes about a month to import cotton from the US or Brazil, while spinners can source cotton from India within the shortest possible time.

Alam also alleged that knitwear manufacturers, who source yarn from the local market, prefer lower-rated cotton, with Indian cotton being the preferred option in such cases.

MA Rahim Feroz, vice chairman of DBL Group, said the demand and colour preferences for cotton vary each year and that the US cotton is the best for white-coloured apparel.

He noted that the demand for white-coloured garments may have declined in the past two years, for which the US cotton imports have slumped.

Talking to the FE, Mahmud Hassan Khan, managing director of Rising Group, said that US cotton is more expensive than other types, and due to the foreign currency shortage in recent years, spinners could not import cotton with long lead time.

He, however, suggested that the consumption of US cotton should be increased to offset the impact of America's retaliatory tariff hikes, which are based on the trade deficit.

The United Sates on April 02 announced a 37-percent tariff on imports from Bangladesh as part of President Donald Trump's sweeping new 'reciprocal tariffs' policy.

According to experts, the computation is that in 2024, Bangladesh exports to the US were worth $8.4 billion and the trade surplus with the US was $6.2 billion. So, the ratio (6.2/8.4) equals 74 per cent.

One-half of that is 37 per cent, the additional duty applicable to imports from Bangladesh, they say about the US tariff arithmetic.

Bangladesh could seek duty exemption on apparel exports to the US, which are made from US cotton, Mr Khan suggested.

In such a case, Bangladesh could propose establishing a warehouse either in the country or in any other transshipment hub to facilitate the process, he added.

Echoing similar views, Little Star Spinning Mills chairman Khorshed Alam said that if a cotton warehouse is set up in Malaysia, Singapore, or Colombo, US traders could store US cotton there, allowing local spinners to access the raw material in the shortest possible time, which will help reduce lead time.

Such system could also increase the share of US cotton in Bangladesh's imports from the existing 12 per cent to as high as 60 per cent, he added.

Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the government has decreased the Export Development Fund in recent times and spinners can't import due to fund crisis, as US cotton takes longer to arrive.

He, however, said the government should sit with the stakeholders to identify the barriers hindering US cotton imports and devise a roadmap to address the challenges.

In 2024, Bangladesh imported 7.5 million bales (1 bale equals to roughly 218 kilograms) of cotton, according to Bangladesh Textile Mills Association (BTMA) data.

The country meets about 35 per cent of its cotton requirement through imports from Africa, followed by 19 to 20 per cent from India, 14 per cent from Brazil, 12 per cent from the US, and 10 to 12 per cent from CIS countries, and the remaining from other parts of the world, according to BTMA.

Munni_fe@yahoo.com