Bangladesh-S Korea trade hits $3b mark

Highlights:

• Bangladesh-S Korea bilateral trade reached $3.035 billion for the first time in 2022
• Bangldesh's diesel import from Korea increased by 703.8% in 2022
• Bangladesh imported diesel worth $972 million in 2022
• Bangladesh's export to Korea reached $678 million in 2022

The volume of bilateral trade between Bangladesh and South Korea crossed the $3 billion mark for the first time in the year 2022.

According to the South Korea International Trade Association (SKITA), the bilateral trade volume between the two countries reached $3.035 billion in 2022, which was 38.71% up from the previous year's $2.188 billion.

Sources said in the last two years, the two countries' bilateral trade was mostly driven by the rise of Bangladesh's diesel import from South Korea.

In 2022, Bangladesh's diesel import from the Asian country increased by 703.8% compared to the previous year to $972 million. In 2021, the amount was $121 million, which was a 450% rise from a year earlier, as per the SKITA.

However, Korea's other major export items to Bangladesh are machinery, petrochemical products, steel and pesticides etc. But the export of these products decreased in 2022 due to the import restrictions imposed by the Bangladesh government due to the dollar crisis.

On the other hand, Bangladesh's export to Korea reached a record high of $678 million in 2022 with 22.9% year-on-year growth. In 2021, the country saw a sharp growth of 40.4% in this regard to $552 million.

Earlier, in 2020, the trade volume declined by 2.9% to $393 million compared to the previous year due to the adverse effect of the Covid-19 pandemic.

According to the Export Promotion Bureau, Bangladesh's apparel export to South Korea saw a 35.66% growth to $255.49 million in July-December of 2023 FY, while it was $188.33 million in the same period of 2022 FY.

Other potential Bangladeshi products that have good demand in South Korea are non-leather footwear, home textiles, jute and jute products etc.

Korean retailer opened office in Dhaka

Shinsung Tongsan, a Korean retailer owning three brands – Topten, Pulham and Ziozia – opened a sourcing office in Dhaka in October last year.

"We are enjoying a double-digit growth in the Korean market despite the slowdown in apparel demands in the global market," said a head of business development of a buying house in Dhaka seeking anonymity.

The retailer, with annual sales amounting to $430 million for its Topten brand, has recently started sourcing knitwear items alongside its main imports such as underwear, denim and shirts, he noted.

Moreover, Coupang, the largest e-commerce company based in Seoul, also dubbed as Korean Amazon, has started importing garment items from Bangladesh.

Bangladesh Garments Manufacturers and Exporters Association (BGMEA) President Faruque Hasan said, "We have invited big buyers and brands in Korea to source products from us during our recent visit to that country."

"We also offered them options of joint collaboration in manufacturing manmade fibre-based products, as they are very experienced in this sector and Bangladesh apparel export had started with their support."

He also mentioned that a number of Bangladeshi exporters will join two expos in Korea this year to explore the market, which would reach a billion-dollar apparel market for Bangladesh by the next fiscal year.

"We hope that the Korean market will be a big export destination within a few years", said the BGMEA president.

According to the International Trade Centre (ITC), South Korea's apparel imports stood at $10.53 billion in 2021. China is their largest export source worth $3.54 billion, followed by Vietnam, Italy and Indonesia.

In a recent interview with TBS, South Korean Ambassador to Bangladesh Lee Jang-keun said South Korea is looking to other sectors apart from readymade garments for its future investments.

"Going beyond the RMG is what we are looking at in the future. We want companies from other sectors to invest here," he said.

According to the International Trade Centre (ITC) data, South Korea's apparel imports stood at $10.53 billion in 2021. China is the largest export source, $3.54 billion, followed by Vietnam, Italy and Indonesia. 

Korea is the country's 20th largest export partner out of 202 destinations.