Exports to Russian zone see 29% growth amid Russia-Ukraine war
When the war started on 24 February, it was assumed that Bangladesh's shipments of export goods would dry up
Despite the ongoing Russia-Ukraine war and exclusion of some Russian banks from using the Swift global payments system, Bangladesh's merchandise shipments to the Russian zone have retained growth, thanks to the use of alternative routes and payment channels, exporters say.
When the war started on 24 February, it was assumed that Bangladesh's shipments of export goods would dry up because of disruptions in supply chains and payment systems.
However, data from the Export Promotion Bureau (EPB) show that the country's export earnings saw about 29% growth to 223.01 million in the markets of Russia, Ukraine, Belarus and Poland year-on-year in March of FY22.
The earnings amounted to $173.12 million in the same month of the last fiscal year.
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Faruque Hassan, president at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, "We are all trying to maintain this market growth through the collective efforts made by stakeholders."
The buyers are trying to receive goods for the Russian market through alternative destinations, and they are also using alternative payment methods, he added.
Some buyers have withheld orders made for the Russian market, while some others have shifted Russian orders to other destinations. The fashion brand LPP is one such brand that has already shipped some goods to Poland instead of Russia, he added.
Pradip Nath, assistant general manager (Compliance & HR) at Interstoff Apparels Ltd, an apparel exporter to the Russian market, said, "We export some products for the Russian market and our shipments are going on despite this war."
The firm is conducting business through the Swedish buyer H&M.
However, Team Group Managing Director Abdulla Hil Rakib said, "My Russian buyers have already cancelled $3 million worth of orders, which were supposed to be shipped in June-July this year."
Besides, some $1.7 million worth of shipments have been deferred to July from April due to the vessel crisis, he also said.
If the war is prolonged, it will adversely affect the European economy as it is mostly dependent on Russia, he added.
Export growth in Poland is normal as it is a growing market, thanks to a number of Polish buyers, who are witnessing their gradual growth in businesses across Europe.
Explaining further, he said the Polish buyer LPP is one of the growing brands. It owns six brands, such as the fashion brand Inditex.
Another polish buyer, PEPCO, was established in 2004. Today the brand has over 2,200 stores across Europe, noted Abdulla Hil Rakib, who is also a director of BGMEA.
TAD Group managing director Ashikur Rahman Tuhin said the impact of the war will be more visible after 3-4 months as it takes 4-5 months to complete shipments of goods under an order.
Russia is the second largest market for the Spanish buyer Inditex, which has already temporarily closed its outlets.
Considering the safety of its customers and employees, H&M, the Swedish fashion giant, has temporarily suspended all sales in Russia.
Not only H&M and Inditex, but a number of brands temporarily closed their stores in Russia, which was reflected in the exports, said Tuhin.
He also said Russian buyers are making payments through Turkey and China, while some others are making payments through Singapore, he added.
According to Export Promotion Bureau (EPB) data, Bangladesh's export earnings amounted to $4.76 billion last month, exceeding the $3.54 billion target set for the month. The country's export receipts were $3.07 billion in March last year.
