Middle East war poses fresh threat to Bangladesh exports

Bangladesh's exports have already been in negative territory for seven consecutive months, weighed down by soft demand in the United States and the European Union. Now, a fresh geopolitical shock from the Middle East threatens to compound the pressure.

The Arab states accounted for nearly $900 million of Bangladesh's annual exports in FY25, only a 2% share in aggregate terms, but significant for specific sectors. More than 60% of that is garments, with the remainder largely vegetables and other agro-products. Any prolonged disruption in the region would therefore strike at both industrial exports and perishable shipments.

Infographic: TBS

Exporters are particularly concerned about the Strait of Hormuz, the narrow maritime corridor that underpins a substantial portion of Bangladesh's trade flows. If the conflict escalates and shipping lanes are constrained, the consequences may extend far beyond delayed consignments.

Dubai, in this context, is not merely an airport. It is a hinge in the architecture of global connectivity – linking Asia to Europe, Africa and North America. Flights from Dhaka to London, Singapore to Frankfurt, and Nairobi to New York all rely, directly or indirectly, on Gulf airspace and transit hubs. When that hinge weakens, aircraft are forced into longer routes, burning additional fuel and disrupting tightly calibrated logistics networks.

Recent developments offer an early signal. Airlines have suspended flights as commercial aviation recalibrates around conflict-affected airspace. Entire corridors of Central Asian connectivity have temporarily thinned because missiles traversed flight paths.

The economic arithmetic is unforgiving. Detours translate into higher fuel consumption at a time when oil markets are already reacting nervously to instability around the Strait of Hormuz, the artery through which roughly 21 million barrels of crude oil pass daily. 

If prices climb toward or beyond $100 per barrel while airlines and cargo operators are compelled into longer routes, cost structures deteriorate rapidly. Insurance premiums rise. Freight charges adjust upward. Ticket prices follow. Supply chains stretch. 

For an export-dependent economy like Bangladesh – already facing subdued demand in its principal markets – the multiplier effect of such disruptions can compound quickly.

Perishables rot at airports

Exporters say the sudden suspension of Middle East-bound flights has already caused financial losses, with perishable goods rotting at airports and new shipments put on hold amid uncertainty over air cargo operations.

On Saturday morning, Chattogram-based exporter Green World Impact transported nearly one tonne of fresh vegetables to Shah Amanat International Airport for shipment to Dubai, one of Bangladesh's key export destinations for agricultural produce.

However, airlines suspended most flights to Middle Eastern countries following regional airspace closures, leaving the consignment stranded. The vegetables eventually spoiled, causing losses of around $1,200.

Mohammad Mahbub Rana, owner of Green World Impact and a vegetable and fruit exporter, told The Business Standard that exporters were caught off guard by the sudden disruption.

"Every day, fresh vegetables and fruits worth around $2,50,000 are exported by air from Chattogram," he said. "After Saturday's cancellations, almost all prepared vegetables went to waste. Because flights remain uncertain, exporters have stopped preparing shipments over the past two days."

According to exporters, vegetable exports from Chattogram have effectively stopped as airlines suspended most Middle East-bound flights.

Pran-RFL Group is a major exporter of agricultural products from Bangladesh to Middle Eastern countries. Kamruzzaman Kamal, a director of the conglomerate, said, "If this conflict is prolonged, our exports will be severely disrupted."

It is not only agricultural goods that are affected; the transit of products to Europe via Middle Eastern airports is also being obstructed, he said.

Apparel exports under strain

Shovon Islam, managing director of Sparrow Group – a leading ready-made garment exporter with an annual turnover of approximately $300 million – said, "Some of my apparel consignments are currently stuck at Dhaka airport. They were scheduled to be flown to the UK as air cargo via Dubai. However, with Dubai airport operations suspended, we are in a difficult position."

He further noted: "The alternative is to route them through Delhi, but Delhi airport has already withdrawn those facilities for us. If we are now forced to reroute through Hong Kong, our costs will escalate significantly."

Expressing frustration, he said, "This situation has become a major cause for concern for us."

Discussions with garment exporters reveal that Inditex, a leading global apparel retailer and a top buyer for Bangladesh, handles a significant portion of its imports from the country via air cargo at its own expense. These shipments primarily use Dubai Airport as a transit hub; however, with operations at Dubai Airport suspended, this import route has been severely disrupted.

A senior official from the Inditex Dhaka office, on condition of anonymity, said, "We are currently unable to ship goods from Bangladesh due to the closure of Dubai Airport."

"We are in the process of gathering data to assess the extent of the impact," he noted, adding that "a prolonged closure would cause significant damage to our supply chain. We are now considering alternative hubs, including Colombo."

Kazi Azmal Hossain, legal affairs secretary of the Dhaka Customs Agents Association, which handles import and export logistics, said, "Our goods are stranded at the airport. We are unable to dispatch them."

A senior official at the Dhaka Custom House also confirmed that export consignments are currently held up. However, he was unable to provide specific data on the total volume of air cargo destined for the Middle East that had failed to depart.

ABM Nazmul Huda, general manager (cargo) Biman Bangladesh Airlines, said, "Except for Saudi Arabia, we are unable to dispatch any cargo to any other country in the Middle East."

Inamul Haque Khan Bablu, senior vice president of Bangladesh Garment Manufacturers and Exporters Association, said, "We have not yet observed any difficulties in shipping goods via sea routes. However, due to the prevailing issues in the Middle East, air shipments have been halted."

He added, "We will begin assessing the extent of the damage after monitoring the situation for a few more days. If the conflict persists and airports remain closed, the supply chain will be severely compromised."

Shipping sector warns of container congestion

Shipping agents said the consequences may extend far beyond immediate export delays if the crisis continues.

A long-term disruption in the Strait of Hormuz could lead to container congestion at major transshipment hubs such as Singapore and Colombo, slowing global supply chains and increasing transportation expenses for Bangladeshi traders.

Khairul Alam Sujan, former director of the Bangladesh Shipping Agents Association, said Bangladesh exports a wide range of consumer goods and agricultural products to Middle Eastern countries, largely targeting expatriate populations.

"Exports to Middle Eastern markets have already been affected due to disruptions linked to the Strait of Hormuz," he said. "This is a strategic global shipping corridor. Any prolonged disruption will impact international trade flows and Bangladesh's shipping operations."