Bangladesh is anticipated to witness a drop in cotton imports in the 2023-24 marketing year, starting from August, primarily due to reduced consumption, as reported by the US Department of Agriculture (USDA) last week.
According to the USDA’s latest report on global cotton markets and trade, cotton imports by mills in Bangladesh may decrease to 7.7 million bales in the current marketing year, marking a nearly 4% decline from the previous month’s forecast of 8 million bales.
The diminished consumption of cotton in Bangladesh, the world’s second-largest garment exporter following China, is predicted to have a ripple effect on global trade.
The USDA noted that global cotton trade might experience a drop of approximately 600,000 bales from the previous month, totalling 43.3 million tonnes, mainly due to reduced consumption in major importing countries, particularly Bangladesh and Vietnam.
Energy shortages are hindering full-scale operations in textile mills in Bangladesh, with factories in Gazipur running at only 60% capacity, according to the Bangladesh Textile Mills Association (BTMA). Moreover, a shortage of dollars is complicating cotton imports due to difficulties in opening letters of credit and the high dollar exchange rate.
The USDA had previously projected a 10% year-on-year increase in Bangladesh’s cotton consumption to 8 million bales for the fiscal year 2023-24, citing the country’s close proximity to surpassing China as the world’s largest cotton apparel exporter and strong demand prospects.
In Bangladesh, the majority of factories specialize in cotton-based garments, constituting over 70% of export shipments.
