RMG exporters feel a pinch of US, EU sanctions on Russia

November 30, 2014

The country’s apparel exporters are feeling a pinch of the sanctions imposed on Russia by the United States and the European Union over Ukraine issue.
The sanctions have no direct impact on the export of Bangladesh but they have an indirect impact as some of the Russian importers are facing hassle following some Russian banks being blacklisted by the US and the EU, exporters have told New Age.
The US and the EU issued sanctions on some Russian big banks including Sberbank of Russia, the country’s largest bank, and Gazprombank and Vnesheconombank (VEB), state-owned development banks, in between July and September in reprisal for Moscow’s actions in neighbouring Ukraine.
Money of some of the exports got stuck as the US and the EU blacklisted the banks and Russian importers are also facing troubles as they used to transact money though the banks with the exporters of Bangladesh, said Faruque Hassan, former BGMEA vice-president.
Some of Bangladeshi products go to Russia through the EU and Turkey but now the buyers of the countries who procured products from Bangladesh are feeling discouraged to export to Russia due to the sanctions, he said.
Faruque, also the managing director of Giant Group, said some of the big Bangladeshi companies set up office in Moscow over the last few years to increase garment export to the country as Russia was a great potential market for Bangladesh.
‘But the recent sanctions may hinder the possibility and we will have to explore other new markets to fill the gap of export growth to Russia,’ he said.
‘We could see a possibility of getting duty-free market access of Bangladeshi products to Russia in recent times but the possibility might be missed out due to the sanctions on Russia over the Ukraine issue,’ former president of the Bangladesh Garment Manufacturers and Exporters Association Abdus Salam Murshedy told New Age on Saturday.
The volume of export to Russia is not significant and the sanction is yet to impact on the export of Bangladesh but it has a long-term indirect impact, he said.
The export earnings of readymade garment from Russia in the first quarter of current financial year 2014-15 amounted to $35.73 million which is 11.84 per cent higher than $31.95 million of the same period of the FY14.
RMG export to Russia in the FY14 fetched $207.74 million with 21.15 per cent growth. The export earnings were $139.55 million in the FY13.

-With New Age input

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