Bangladesh, the world’s second-largest exporter of readymade garments, is heavily reliant on cotton imports to fuel its textile industry. Recently, the Bangladeshi government has eased the rule of compulsory fumigation tests for American cotton imports, which is expected to streamline the import process and reduce costs. This article will explore how easing the rules for the import of US cotton will benefit Bangladesh’s textile industry.
Background on the Textile Industry in Bangladesh
The textile industry is a critical sector for Bangladesh’s economy, accounting for nearly 85% of the country’s total exports. The industry employs around 4.5 million workers, the majority of whom are women. Cotton is the primary raw material for the textile industry, and the majority of Bangladesh’s cotton needs are met through imports.
Prior to the rule change, fumigation tests were mandatory for American cotton imports, causing delays and additional expenses for textile millers. This new provision, added to the Import Policy Order 2021-24, allows importers to bring cotton grown in the Western Hemisphere or American region furnishing a sanitary and phytosanitary certificate and paper certifying that the imported consignment is free from Boll Weevil, a cotton pest in North America, issued by the competent authorities.
Benefits of the Rule Change for Bangladesh’s Textile Industry
Reduced Costs and Improved Efficiency
The easing of the fumigation rule is expected to save textile millers both time and money. The additional costs and time associated with fumigation tests have been a significant concern for the industry for years. The new provision will streamline the import process, reducing delays and the costs associated with additional testing.
According to Mohammad Ali Khokon, president of Bangladesh Textile Mills Association (BTMA), this is a positive step for the industry, stating that “it will reduce the hassle of businesses and cost of doing business too.” This reduction in costs will help improve the industry’s efficiency and competitiveness, making it more attractive to foreign buyers.
Increased Use of American Cotton
Bangladesh primarily imports cotton from Africa and India, with the USA and other countries also supplying smaller quantities. The easing of the fumigation rule is expected to increase the volume of American cotton imported into Bangladesh, given the quality of American cotton is good and has wide acceptability. In the marketing year 2020-2021, Bangladesh imported approximately 906,000 bales of US cotton, representing 9% of its total cotton imports.
Matin Chowdhury, managing director of New Asia Group, believes that the use of American cotton may increase following the easing of the rule, which will lead to greater efficiency within the industry. Additionally, the increased use of American cotton is expected to facilitate exports, enabling Bangladesh to continue expanding its textile industry.
