Export to Russia rebounds on alternative measures

It was thought that the shipment of garment items to Russia would come to a standstill because of the outbreak of the war with neighbouring Ukraine since February 24 in 2022.

Following the outbreak of the war, the shipment of goods, especially garment items, almost stopped and many Russia-bound ships had to wait for the green signal at Chattogram port.

However, the shipments were finally made through alternative routes -- Poland and Germany's Hamburg.

The shipments did not stop through the alternative routes as the local garment makers continued to meet the demand of the Russian clothing retailers and brands.

Apart from the vessel routes, the local garment exporters faced challenges over receiving payments as the European countries put a ban on the use of SWIFT by the major banks in Russia.

Moreover, almost all Western clothing retailers and brands withdrew their businesses from Russia protesting the war.

However, almost all the challenges have been solved and the shipment of the garment items to Russia from Bangladesh continues.

The local exporters have been accepting payment in the Chinese currency, yuan, and in some cases the Russian importers are paying the local exporters in US dollars from third countries such as Turkey, Germany and some other neighbouring nations.

Moreover, the local exporters are being encouraged to ship goods to Russia, one of the most emerging markets, as Bangladesh Bank also instructed to accept payments in yuan which will also facilitate paying for imports from China.

After the departure of the western clothing retailers and brands, domestic Russian retailers and brands revived their businesses in larger volumes as the Russian economy is not been too much damaged for the war.

As a result, business in Russia is almost as usual like in the pre-war period.

Garment shipment to Russia grew by 45.65 percent year-on-year in the July-September period of the current fiscal year to $42.30 million, according to data from the Export Promotion Bureau (EPB).

Of the items, shipment of woven garments grew by 48 percent to $13.86 million while knitwear by 44.53 percent to $28.44 million, the EPB data also said.

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said the central bank's directive on accepting payments in yuan helped revive exports to Russia even at the time of war.

The demand for locally made garment items in the Russian markets in fact is growing as the Russian economy was not that much affected by the war, he said.

Md Shahidullah Azim, vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said export to Russia has been increasing because many are shipping goods to Russia through alternative routes.

Usually, exports to a country engaged in war does not grow, he added.