Apparel exports to Russia down 59% in March amid war

Bangladesh’s goal to export $1 billion worth of goods to Russia has been shattered by the ongoing Russia-Ukraine war.

According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the country fetched $22.19 million in March, down over 59 percent from $54.67 million for the corresponding month of the previous year.

Since Russia’s invasion of Ukraine on February 24 this year, the former is facing a raft of sanctions from the USA, Europe, Japan, UK and Australia.      

SWIFT, an international payment gateway, without which today’s cross-border transactions are impossible, has excluded Russia from its network.  

All these reasons have forced exporters to ‘go slow’ in export to Russia.

“As Russia is not a big market, our total exports have not been affected much. Exports to Russia fell sharp in April as some of the exporters stopped shipping to Russia,” said Muhammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) on Saturday.  

Shahidullah Azim, vice president of BGMEA, said they have instructed their members to follow the ‘go slow’ strategy about export to Russia as there are multiple embargoes imposed against the country, including the global financial transaction sanction.

“Currently, we are receiving the payments through China and America. We will sit with the Russian envoy to Bangladesh this week to discuss payment options for our products,” he added. 

Bangladesh exported goods worth $503 million during July-March of fiscal 2021-22, a 22.68 percent growth year-on-year, Export Promotion Bureau (EPB) data showed.

In FY19, exports to Russia were recorded $489 million while $441 million in FY20 and $593 million in FY21.  

Exports to Russia have been increasing steadily for the last several years and exporters expected that shipments could reach $1 billion at the end of the current fiscal year.

In the first nine months until March of the current fiscal year, Bangladesh fetched $31.42 billion from apparel export globally. Of the amount, $4.78 billion came from non-traditional markets including Japan, Australia, India and Russia.