US Cotton Shipment To Bangladesh May Double In 5 Years

Market News

US Cotton Shipment To Bangladesh May Double In 5 Years

The United States is aiming to double its cotton exports to Bangladesh in the next five years, representatives of a US body have said. Bangladesh's apparel industry is expected to grow at an average of 12% in the coming years, while keeping up with that pace, the demand for cotton will annually increase at a rate of 10%, said the representatives of Cotton USA, the non-profit body which promotes US cotton fibre and manufactured cotton products around the globe.

Currently, the US exports 160,000 bales of cotton each year. However, it wants exports to double in the next five years as the local demand for better quality cotton increases. The three-member Cotton USA delegation, led by the President of Cotton Council International Keith Lucas, was in Bangladesh recently.

"The target is to increase our cotton export at around the same rate as the apparel industry grows; if not higher," said Keith Lucas, President of Cotton Council International. The US delegates' remark comes at a time when Bangladesh has just become the largest cotton importer in the world.

Last year, Bangladesh imported 6.10 million bales of cotton, of which 2.99 million bales or 49% came from India. With nine million bales of overseas shipment in the year 2015-16, the United States stands as the largest cotton exporter in the world. However, its share in the Bangladeshi market is only 3%. Rapid shipment, price competitiveness and relaxed settlement of dispute are often attributed as the key factors for Indian dominance in the Bangladeshi cotton market.

President of Bangladesh Textile Mills Association, Tapan Chowdhury, said that the rising price of Indian cotton in recent times means that the US and other competitors will have an opportunity to grab a larger share in the local market.

"Moreover, contrary to China, where a large amount of apparels are now made of polyester - 86% of Bangladesh's apparel are produced from cotton and that figure is likely to remain more than 80% in the coming years," said Bruce Atherley, Executive Director of Cotton Council International. "So, unlike China, the demand for cotton is likely to remain stable in Bangladesh and the US would like to tap this market", he added.

The US representatives also highlighted that compared to many of its competitors, American cotton is almost contamination-free, well classified, reliable and consistent in maintaining a high level of quality. "Although US cotton is apparently pricier than some of its competitors in India and other countries, the total production cost for the apparel manufacturer using US cotton is ultimately the same, if not lower, when you consider those efficiency and quality issues", Keith Lucas pointed out.

However, the US delegation pointed out that imported US cotton has to go through a fumigation process while entering Bangladesh. Terming the probation 'outdated', they called for lifting this age-old requirement. Removing this probation would be beneficial both for the importers and exporters, they said.