Latin America turning into major export market
Latin America is turning into a major export destination for Bangladesh riding on higher apparel shipments at competitive prices as part of the country's efforts to diversify.
Local exporters are performing strongly in the markets of 66 crore consumers in more than 25 countries despite as high as 35 percent duty on the shipment of goods.
The upward trend in the trade has been driven by the opening of embassies by a couple of countries, growing network between trade bodies, and the awarding of zero-duty benefits to Bangladesh by Chile.
Bangladesh's merchandise shipment to Latin American countries grew 20.51 percent year-on-year to $621.27 million in the fiscal year of 2022-23, according to data from the Export Promotion Bureau. It was $515.50 million in FY2021-22.
In the first two months of the current fiscal year, export receipts stood at $107.75 million.
The Latin American nations, especially Brazil and Argentina, are also becoming key suppliers of cotton, maize, oil seeds and sugar.
Brazil and Argentina, two major economies in the region, have set up full-fledged embassies in Bangladesh recently to facilitate trade and investment.
Md Anwar Shawkat Afser, president of the Latin America-Bangladesh Chamber of Commerce and Industry, says the export of goods from Bangladesh to Latin American countries was insignificant even a few years ago.
"Now, the volume is growing at a faster rate as networking is expanding."
Apart from garment items, the shipment of other goods like jute and jute goods, plastic goods, medicines, and leather and leather goods is increasing.
"Latin America is a very big market for Bangladesh's garment and textile sector as local manufacturers are well-positioned to supply goods in line with their fashion and style," said Shams Mahmud, managing director of Shasha Denims Ltd.
Shasha Denims, one of the largest garment manufacturers in Bangladesh, used to ship denim fabrics to Latin American countries such as Guatemala and Colombia before Covid-19.
Asif Ashraf, managing director of Urmi Group, says Latin America has a big potential for Bangladesh.
Bangladesh has been enjoying zero-duty benefits in Chile since 2015. The country's move has helped a lot to explore the markets in the region, Afser said, adding that Brazil is negotiating to export beef to Bangladesh.
Overall imports for Latin America and the Caribbean were $1,210 billion in 2021, data from the World Bank showed. The United States, China, Brazil, Germany and South Korea were top exporters.
Of the sum, textiles and clothing imports amounted to $38.37 billion with China, the United States, India, Honduras and Vietnam being the top suppliers.
In the same year, the region imported footwear items worth more than $6.22 billion. Key suppliers were from China, Vietnam, Brazil, Indonesia and the US.
Since China is a major supplier to the region, Bangladesh has the opportunity to capture a major market share in the areas where the Chinese stake is falling owing to higher production costs, said a businessman.
"Bangladesh has huge potential in Latin America since all of the markets in the region are emerging economies," said Faruque Hassan, president of Bangladesh Garment Manufacturers and Exporters Association.
In the past, a number of garment exporters led by Hassan went there to explore trade opportunities.