Bangladesh's cotton consumption is expected to rise slightly to 7.8 million bales in Marketing Year (MY) ‘24-25, which began in Aug’24, according to a report by the US Department of Agriculture (USDA). Of this, 7.7 million bales will be imported.
As the second-largest RMG exporter and the largest importer of raw cotton globally, Bangladesh plays a crucial role in the international cotton market. The USDA initially forecasted in Apr’24 that Bangladesh's domestic cotton consumption for MY25 would reach 8 million bales, but in Sep’24, it revised its estimate to 7.7 million bales. In its latest ‘Cotton: World Markets and Trade’ report, the USDA slightly increased its projection to 7.8 million bales, further solidifying Bangladesh's position as a major player in the global RMG industry.
In the 2023-24 period, Bangladesh's primary suppliers of raw cotton were West African countries, along with India, Brazil, and the US. Notably, Bangladesh recently lifted the requirement for fumigation of US cotton upon arrival after nearly 50 years, a move welcomed by Bangladeshi apparel exporters. This change is expected to streamline the import process, reducing time and costs.
Bangladesh has repeatedly requested the US to grant duty-free access to RMG items made from US cotton, a preferential export treatment that has been denied. Apparel exporters believe that granting duty-free access would open up more opportunities for the Bangladeshi apparel industry, given the significant potential for US cotton growers and exporters to further tap into this market. In 2023, Bangladesh was the fifth-largest export market for US cotton, with export values exceeding $339 million, according to the USDA's Foreign Agriculture Services (FAS).
Global cotton prices, as reported by the World Bank's ‘Pink Sheet’ for July-Sep’24, declined by 15 per cent to $1.79 per kilogram from $2.11 during the same period in 2023. Despite the challenges posed by rising energy costs, a gas crisis, and the availability of US dollars for opening letters of credit (LCs), yarn production is expected to increase this year, driving higher cotton imports and domestic consumption.
In MY25, Bangladesh consumed 7.6 million bales of cotton, though domestic cotton production remains minimal, covering just 0.55 per cent of the country's 8.1 million hectares of arable land and accounting for less than 2 per cent of total consumption.
