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04 February 2023

Business Insider Bangladesh

Bangladesh, S Korea bilateral trade crosses $3bn in 2022

UNB || BusinessInsider

Published: 14:42, 25 January 2023   Update: 17:24, 25 January 2023
Bangladesh, S Korea bilateral trade crosses $3bn in 2022

Photo: Collected

According to the statistics of South Korea International Trade Association, the trade volume between South Korea and Bangladesh in 2022 recorded USD 3.035 billion, 38.71 percent up from 2021 which was USD 2.188 billion.

Bangladesh’s export to Korea increased by 22.9 percent to USD 678 million in 2022 from USD 552 million in the previous year while Korea’s export to Bangladesh rose by 44.1 percent to USD 2.357 billion in 2022 from USD 1.636 billion in 2021.

Bangladesh’s export to Korea has been continuously increasing since it crossed for the first time USD 100 million in 2007 and reached USD 200 million in 2011 and USD 300 million in 2013.

But it had remained stagnant for about a decade then after and shrunk by 2.9 percent in 2020 recording USD 393 million due to the adverse impact of the Covid-19 pandemic, according to the South Korean Embassy in Dhaka.

However, it witnessed a big rebound in 2021 to USD 552 million with a sharp increase of 40.4 percent year-on-year and recorded another record high of USD 678 million in 2022 with a 22.9 percent year-on-year increase.

The main export items of Bangladesh to Korea are RMG, sports and leisure items and bronze scraps, etc.

RMG, which accounts for 83.2 percent of total export to Korea, recorded USD 564 million in 2022, increasing 25.8 percent year-on-year, while paper products and favorite food skyrocketed by 168.6 percent and 165 percent with USD 3.6 million and USD 3.1 million respectively.

The export of bronze scrap rose by 41.8 percent with USD 17.76 million.

Korea’s export to Bangladesh, which peaked at USD 1.63 million in 2011 fell sharply and hovered at USD 1.2 billion for almost one decade.

During the Covid-19 pandemic, it further deepened to USD 1.03 billion in 2020.

After a decade of stagnation, it finally rebounded to USD 1.636 billion in 2021, increasing 58.3 percent year-on-year and to USD 2.357 billion in 2022 with a 44.1 percent year-on-year increase.

However, the increase in Korea’s export to Bangladesh in 2021 and 2022 was mainly led by the hike in Bangladesh’s import of diesel from Korea which rose by 703.8 percent to USD 972 million in 2022.

Korea’s export of diesel to Bangladesh rose by 450 percent in 2021 to USD 121 million.

While other major export items of Korea to Bangladesh are machinery, petrochemical products, steel and pesticides, etc., they all saw a decrease in 2022.

It appears to be mainly due to the import restrictions imposed by the Bangladesh Government due to the foreign reserves situation in the country in the aftermath of the Ukraine-Russian war.

Ambassador Lee Jang-keun said that the year 2023 which marks the 50th anniversary of diplomatic ties between Korea and Bangladesh will mark a momentous turning point in the bilateral ties between the two countries overcoming the challenges of Covid-19 pandemic and global economic challenges derived from the Russian-Ukraine war.

He also hoped that the Bangladesh business sector takes advantage of the preferential trade policy of Korea which provides duty and quota-free access to the Korean market by 95 percent of Bangladesh products since 2008.

Export to Korea, a non-traditional market, will also be given the benefit of receiving at least 4% of cash incentives by the Bangladesh government.