Direct buying may boost RMG exports

Direct cotton sourcing from US farmers could boost apparel exports to the country amid rising trade tensions and tariff uncertainties, said a Bangladeshi-born American entrepreneur on Thursday.

American cotton farmers wield political influence through their Congressional representatives and senators from cotton-growing states, said Aswar Rahman, chief executive officer of AmeriBangla Corporation, a platform connecting US farmers and Bangladeshi mills through fair pricing and a transparent supply chain.

He made the statement at a high-level trade meeting held at The Westin Dhaka.

The cotton sourcing process currently involves nine intermediaries from farmers to millers, he said.

But AmeriBangla aims to enable direct cotton imports from American farmers, bypassing the merchant syndicates that dominate global cotton trade, by connecting farmers, ginners, and millers, he explained.

"It could be a strategic alliance between American cotton farmers and Bangladesh's ready-made garment (RMG) sector, which could potentially reshape the sourcing model and trade dynamics between the two nations," said Mr Rahman.

"Bangladesh's future in the US market may hinge on this direct sourcing model," he also said.

"If our spinners and millers adopt American cotton on a large scale, we can align ourselves with powerful agricultural constituencies in the US who have real influence in Congress," he added.

According to him, what makes this partnership unique is the role of American cotton farmers, a politically-powerful constituency often overlooked in international trade discussions.

"If we can bring American farmers to the negotiation table, it will be a game changer," said Mr Rahman. "No one in Washington wants to antagonise their farmers."

Under the proposed framework, American farmers may advocate in Congress - and even directly to President Donald Trump - for tariff relief for Bangladeshi apparels in exchange for guaranteed demand from the country's RMG sector, he said.

He also mentioned that the strategic partnership includes five core elements - a streamlined ordering system for Bangladeshi mills to buy directly from US farmers, permission to establish a bonded warehouse in Bangladesh for duty-free cotton storage, commitment to sourcing the majority of cotton from American producers, tariff advocacy by US cotton farmers on behalf of Bangladeshi exporters, and joint demand generation campaigns in the US market to promote garments made with American cotton.

Starting with the harvest of August 2025, selected Bangladeshi spinners and composite factories are expected to place their first direct orders, said Mr Rahman.

He confirmed that six Bangladeshi companies are already in the process of finalising agreements.

Mohammad Rashed, vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said, "If they offer country-specific facilities, it may help promote American cotton as its price is higher compared to others. However, the industry will need at least 18 months to fully prepare for direct buying on a large scale."

AmeriBangla has also sought government approval to set up a bonded warehouse in Bangladesh with the capacity to store up to one million bales of American cotton.

The facility would require land equivalent to 13 cricket fields, as well as ensure year-round supply stability and faster access for local spinners.

To build brand value around garments made from American cotton, AmeriBangla plans to open a dedicated showroom in Manhattan, showcasing products labelled "Made with American Cotton, Sewn in Bangladesh".

Mr Rahman cited a recent study that showed US consumers are willing to pay up to 17 per cent more for clothes made with American cotton.

As early as December 2025, major US retailers are expected to receive regulatory incentives to source only American cotton-made apparels.

"We believe there is over 80 per cent chance that the use of US-grown cotton will be encouraged - if not mandated - by year end," Mr Rahman said.

"Bangladeshi exporters must adapt now to retain their competitiveness in the US market," he added.

Bangladesh currently exports over $10.6 billion worth of goods to the US annually, which is growing at an 8 per cent compound annual growth rate (CAGR).

Meanwhile, US cotton sales to Bangladesh stand at over $2 billion annually.

The new sourcing model is expected to significantly increase this figure while helping Bangladeshi exporters maintain preferential access to their top market.

AmeriBangla also urged the Bangladesh government to revise import and warehouse regulations to allow cotton farmers and networking platforms to establish bonded warehouses - a key enabler for a smooth execution of the direct buying model.

"In this chaos, there is opportunity," Mr Rahman noted.

"Opportunities multiply as they are seized, and this partnership could be the one that secures our industry's future in the US," he added.

Among others, BKMEA Director Minhajul Haque, Ha-Meem Group Director Sajid Azad and CEO Muhammad Amin, Hoorain Fabrics Ltd Chief Marketing Officer Abdul Hakim, True Group Marketing Director Tareq Mamun Chawdhury, Divine Group Head of Business Development Khurshid Alam, Marubeni Group Deputy General Manager Md Arifuzzaman, and AmeriBangla Senior Advisor Brigadier General (retd) Ali Ahmed Khan were present at the event.

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