Earlier this year, on 24th February, when the Russia-Ukraine war started, Bangladesh’s trade was expected to face disruptions and decline. But despite the ongoing war and the exclusion of some Russian banks from using the Swift global payments system, Bangladesh’s merchandise shipments to the Russian zone have retained growth.
Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, “We are all trying to maintain this market growth through the collective efforts by stakeholders.” He also added that the buyers are trying to receive goods for the Russian market through alternative destinations, and they are also using alternative payment methods.
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.
According to Faruque Hassan, some buyers have withheld orders for the Russian market, while 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.
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. Although considering the safety of its customers and employees, H&M, the Swedish fashion giant, has temporarily suspended all sales in Russia.
However, Team Group Managing Director Abdulla Hil Rakib said, “My Russian buyers have already canceled $3 million worth of orders, which were supposed to be shipped in June-July this year.” He also added that some shipments worth $1.7 million had been deferred to July from April due to the vessel crisis.
If the war is prolonged, it will adversely affect the European economy, primarily dependent on Russia. Ashikur Rahman Tuhin, Managing Director of TAD Group, said the impact of the war would be more visible after 3-4 months as it takes 4-5 months to complete shipments of goods under an order. The Spanish retailer Inditex has already temporarily closed its outlets in Russia, the second biggest market for the company. In addition to H&M and Inditex, other brands have temporarily closed their stores in Russia, which has reflected the exports.