In a surprising move, Bangladesh’s commerce ministry has reimposed the mandatory provision of fumigating cotton imported from the United States and the Western Hemisphere at its ports. This decision is expected to raise the lead time and cost of production for importers, ultimately hitting the country’s export competitiveness.
The government had previously relaxed the requirement in February of this year, allowing US cotton importers to bypass fumigation by showing sanitary and phytosanitary (SPS) and boll weevil-free certificates of the US exporting authorities at domestic ports. This was a positive development for domestic importers and spinners as it saved them time and money.
However, the sudden decision to reimpose mandatory fumigation has left many importers and exporters confused. Joint Secretary in the commerce ministry, Mirajul Islam Ukil, was unable to provide an explanation for the decision, according to a report in a Bangladesh newspaper.
The United States is a significant source of cotton for domestic millers, traders, and importers in Bangladesh. The decision to reimpose fumigation requirements on cotton imports from the US and the Western Hemisphere is expected to have a significant impact on the country’s cotton industry.
Importers and spinners are concerned that the new requirement will increase the cost of production, making it more challenging for them to compete in the global market. The additional lead time caused by fumigation could also delay production schedules, causing further economic losses.
The reasons behind the decision to reimpose fumigation requirements on US cotton imports remain unclear, but some speculate that it may be related to concerns about pests or sanitary and phytosanitary issues.
Regardless of the reasons behind the decision, the move has significant implications for the country’s cotton industry, which has been struggling to compete in the global market due to high production costs. It remains to be seen how the new rule will impact the industry in Bangladesh and whether it will have any knock-on effects on the country’s overall economic growth.