PTA can boost fabric & yarn trade between Sri Lanka & Bangladesh

21 Apr '23

2 min read

Pic: Shutterstock.com

Insights

A proposed PTA between Sri Lanka and Bangladesh could enhance bilateral fabric and yarn trade, as both countries are significant garment exporters and global competitors.
Sri Lanka has requested that Bangladesh resume PTA negotiations to increase trade between the nations.
Post COVID-19, Sri Lanka's fabric exports to Bangladesh nearly doubled.

A preferential trade agreement (PTA) between Sri Lanka and Bangladesh has the potential to boost bilateral trade of fabric and yarn, as both countries are major garment exporters and competitors in the global market. Fabric and yarn, significant products in the textile sector, offer opportunities for increased trade between the two nations. Sri Lanka is currently a net exporter of fabric and yarn to Bangladesh, with both countries relying heavily on garment exports for foreign exchange earnings.

Recently, Sri Lanka requested that Bangladesh resume negotiations on a proposed PTA, aiming to increase bilateral trade between the friendly nations. The Lankan High Commission in Dhaka has suggested a virtual meeting next week to discuss the current status and the path forward.

Post COVID-19, Sri Lanka's fabric exports to Bangladesh nearly doubled in two years, reaching $41.133 million in 2022, up from $22.678 million in 2020. Sri Lanka exported fabric worth $29.319 million in 2021, $22.678 million in 2020, $32.944 million in 2019 and $33.068 million in 2018. Fabric imports from Bangladesh were noted at $5.551 million in 2022, $7.721 million in 2021, $7.206 million in 2020, $6.900 million in 2019 and $2.611 million in 2018, according to Fibre2Fashion's market insight tool TexPro.

Sri Lankan yarn exports have experienced impressive growth in recent years, with shipments reaching $5.752 million in 2021, up from $1.273 million in 2018. However, there has been some volatility in these figures over the years. Yarn exports dipped to $0.890 million in 2019, then surged to $3.867 million in 2020. While the upward trend continued to $5.752 million in 2021, exports decreased to $4.511 million in 2022.

On the other hand, Sri Lankan yarn imports from Bangladesh were considerably low, with figures of $1.192 million in 2022, $2.383 million in 2021, $1.707 million in 2020, $0.883 million in 2019, and $1.230 million in 2018, as per TexPro.

As both Sri Lanka and Bangladesh are not only major garment exporters but also competitors in the global market, there has been limited bilateral trade between the two countries. However, Sri Lanka does supply fabric and yarn to Bangladesh in limited quantities. To meet its growing consumption, Bangladesh needs to explore raw material sourcing from various sources, given its success in the garment sector in recent years. Both countries can explore bilateral synergies to their mutual benefit.

Fibre2Fashion News Desk (KUL)

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This according to Fibre2Fashion's Market Intelligence Tool - TexPro