Bangladesh eyes unexplored RMG markets in Brazil

Rafiqul Islam Azad : Bangladesh is seeking to tap into the untapped Readymade Garments (RMG) market in Brazil to reduce the widening trade gap between the two countries, according to sources.
A senior official in the Ministry of Foreign Affairs informed this correspondent that during a recent meeting between Brazilian Foreign Minister Mauro Vieira and Bangladeshi Foreign Minister Hasan Mahmud held in Dhaka, Bangladesh urged Brazil to address the widening trade gap.
Brazil was the fifth-largest import source for Bangladesh in the 2022-23 fiscal year, with imports recorded at $2,592.5 million (3.80 percent of total imports), according to data from the Bangladesh Bank. The total import value for Bangladesh was $68,459.9 million during this period.
In the 2021-22 fiscal year, Brazil was the eighth-largest import source for Bangladesh, with imports recorded at $2,245.1 million (3.00 percent of total imports). The total import value for Bangladesh was $75,604.4 million during this period.
Bangladesh exported goods worth $175 million to Brazil, while its imports from Brazil amounted to $2,592.5 million, resulting in a trade gap of over $2.4 billion.
During the July-February period of the 2023-24 fiscal year, Bangladesh exported goods worth $136 million to the Latin American country.
Former BGMEA Vice-president Shahidullah Azim emphasized the need for Bangladesh to penetrate deeply into the Latin American market, particularly Brazil, which is emerging as a key economy in the region.
“The competitiveness and strength of our textile and clothing industries have increased over the last 40 years since the journey began in the late ‘70s. Brazil is an important economy in Latin America. Our exporters have the capacity to tap into that market,” he said.
Shahidullah Azim, also Managing Director of Classic Fashion Concept Ltd, a leading readymade garment exporter, said increased exports of readymade garments to the Brazilian market would help reduce the widening trade gap with Latin America.
He further said Bangladesh should initiate talks on signing Free Trade Agreements (FTAs) with major importing countries to maintain present export growth.
In 2022, Brazil imported textiles and clothing worth $5.9 billion. China was the top exporter with $3,476.1 million, followed by India with $317.7 million, Paraguay with $230.3 million, the USA with $156.3 million, Vietnam with $151.6 million, Bangladesh with $150.6 million, and Indonesia with $138.1 million.
Asif Ibrahim, former DCCI president, said Latin American markets like Brazil, Argentina, and Uruguay remain untapped, even though Bangladesh is the second-largest exporter of clothing in the global market. He added that some Bangladeshi garment products are being exported to Brazil through top global markets, but Bangladesh hardly directly exports readymade garments (RMG) to Brazil.
He emphasized that collective efforts of BGMEA, Export Promotion Bureau (EPB), Bangladesh missions in Latin America, and Latin American missions in Dhaka could play a key role in penetrating Latin American markets.
A top official of the commerce ministry, while speaking to this correspondent, said that Bangladesh would explore the pros and cons of exporting goods to the Brazilian market.
Brazil is the fourth-largest cotton producer and second top exporter, while Bangladesh is the second-largest cotton importer in the world.
Bangladesh and Brazil have increased their engagement in multilateral sectors, especially in trade and investment, as bilateral trade between the two countries has shown higher growth in recent times, the official said.
Meanwhile, Prime Minister Sheikh Hasina recently called upon Brazil to directly import Readymade Garment (RMG) products from Bangladesh.
“RMG goods from Bangladesh have been exported to Brazil on a limited scale through a third party. It will be more affordable for Brazil if the country directly imports RMG items from Bangladesh,” she said.
The premier made these remarks during a courtesy call by a delegation from Brazil led by its Foreign Minister Mauro Vieira at her office.
Stressing the need to ensure trade balance between Bangladesh and Brazil, Sheikh Hasina said the trade balance between the two countries has highly tilted toward Brazil.
She suggested that Brazil could import more products, including jute goods and leather items, from Bangladesh to ensure trade balance.
As Bangladesh has become an emerging economy in the region and has maintained steady economic growth over the years despite the pandemic, Brazil’s President Luiz Inácio Lula da Silva has decided to expand multilateral engagements, especially in trade and investment, with Bangladesh, according to diplomatic sources.
As part of this strategy, a high-powered trade delegation from Brazil visited Bangladesh in May 2023 with the aim of strengthening bilateral trade.
Meanwhile, Bangladesh’s exports to Brazil, the largest market in Latin America, posted a 60 percent growth over the previous fiscal year, according to data from the Export Promotion Bureau (EPB).
In the 2021-22 fiscal year, Bangladesh exported goods valued at $109.20 million to Brazil. The main products exported to Brazil were jerseys, pullovers, cardigans, shirts, and suits, among others.
Exports from Bangladesh to Brazil have increased at an annualized rate of 9.08 percent from $15.1 million in 1995 to $132 million in 2020.
In the 2021-22 fiscal year, Brazil exported goods valued at $2,245.1 million to Bangladesh. The main products exported to Bangladesh were cane or beet sugar, cotton, and soybeans.
Brazil, as the largest economy in South America, is keen to increase trade relations with Bangladesh, as Bangladesh has emerged as a new economic giant in the South Asian region, said Brazil Ambassador to Bangladesh Paulo Fernandos Dias Feres.