Bangladesh’s plastic exports have lost momentum in the first nine months of the current fiscal year, following strong growth in the 2024-25 fiscal year, as global demand weakens.
Exporters say softer demand in Europe has undermined the sector’s core markets, while a brief surge in orders from the United States provided only temporary support.
They add that the advantage over Chinese competitors, driven by tariff differences, faded in February, and new orders to the US are now slowing, raising concerns over the outlook for the sector.
Export Promotion Bureau data showed total plastic exports rose 16.2 per cent to $284.05 million in FY25 from $244.43 million a year earlier. Growth has since stalled, with shipments slipping 0.42 per cent year-on-year to $225.33 million in the first nine months of FY26 from $226.29 million.
Shipments to the United States rose 42.9 per cent to $14.08 million in FY25, lifting its share to 4.96 per cent from 4.03 per cent. The concentration intensified in FY26, with exports reaching $26.06 million in the first nine months and the US share rising to 11.57 per cent.
The surge was driven by a temporary tariff advantage. Higher US duties on Chinese goods in November 2024 created a 10 to 20 percentage point gap, which widened intermittently from April 2025 and drew buyers to Bangladesh.
The advantage narrowed sharply in February to about 1 percentage point after US duties on Chinese plastic goods aligned with those on Bangladesh and Vietnam. Orders have begun weakening as buyers shift back to China, citing lower freight costs, faster delivery, and a more established supply chain.
Fresh US orders for upcoming shipments have dropped by 70 to 80 per cent for some factories, signalling a sharp reversal, industry insiders said.
A tariff-driven edge had temporarily offset structural weaknesses, said RFL Managing Director R N Paul. “Without that gap, exporters would have struggled on price and efficiency due to reliance on imported raw materials and a less developed industrial ecosystem,” he said.
Rising fuel prices since the beginning of the war in Iran have added pressure, forcing exporters to seek price increases of around 20 per cent, compared with roughly 10 per cent for Chinese competitors, he added.
Europe demand growth slows
Bangladesh continues to benefit from duty-free access to the European Union (EU) under the Generalised System of Preferences, while Chinese products face duties of 50 to 60 per cent depending on category. Exporters said demand growth in Europe has slowed compared with the previous year.
Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA) Senior Vice President K M Iqbal Hossain said Africa and Europe account for a significant share of exports, with Europe offering better prices.
He added that shipments to India’s Seven Sisters region have slowed due to recurring instability.
Plastic export earnings have increased more than fourfold over 15 years to $284.05 million in FY25 from $68.76 million in FY11, with exports now reaching more than 80 countries. The United States remains the largest single market, followed by the EU, Middle Eastern countries, and India.
Sector evolves over two decades
The sector began exporting about 25 years ago with shopping bags to Singapore and African markets. Early players included Bari Plastic and Super Thai Plastic, while only two to three companies exported directly despite around 100 operating overall due to strong domestic demand, Paul said.
The industry has consolidated to around 50 companies, with fewer than 10 direct exporters, while Bangladesh Plastic Goods Manufacturers and Exporters Association estimates 20 to 25 member firms are engaged in exports. About 90 per cent of output is consumed domestically.
RFL leads exports, followed by Akij and ACI. Bengal Group remains active in deemed exports after a 2024 factory fire reduced direct shipments. Around 80 per cent of exports are direct and 20 per cent linked to garment accessories such as hangers and buttons.
The sector spans six sub-sectors and about 30 products, including household goods, packaging, furniture, and engineering plastics. Higher-value segments include motorcycle components produced by 15 to 20 companies, with plans to expand into car parts.
Bangladesh exports 21 types of garment accessories alongside plastic furniture, polyvinyl chloride (PVC) pipes, and jumbo bags.
ACI Premio Plastics Director F H Ansarey said major producers such as RFL, ACI, Akij, and Bengal dominate household plastics, including jugs, buckets, wardrobes, and tables.
Growth has been driven by improved quality, diversification, and expansion of domestic demand, which increased production volumes, reduced per-unit costs, and improved efficiency, Paul said.
Industry leaders said factory standards are now at a global level.
Heavy reliance on imported raw materials
The sector remains heavily dependent on imports, with about 80 per cent of raw materials sourced from the Middle East and China and the rest from recycled inputs developed over the past 15 to 20 years.
Meghna Group produces resin at one stage for PVC pipes, while most manufacturers import ready-made inputs. Key materials include polypropylene, low-density polyethylene, high-impact polystyrene, general-purpose polystyrene, and acrylonitrile butadiene styrene used in automotive parts.
Around 70 per cent of moulds are imported, with local production covering about 30 per cent. Importing moulds takes three to four months, compared with about two weeks locally, Ansarey said.
Import duties, port charges, and demurrage raise costs, with taxes and value-added tax (VAT) accounting for about 30 to 32 per cent, including 15 per cent VAT and advance income tax.
Policy bottlenecks slow export growth
Exporters cite delays in bonded facilities, difficulty accessing incentives, barriers to new factory setup, limited bank financing, and shortages of skilled labour. They also point to rising industrial land prices from Tk1,80,000 to Tk12 lakh and pressure from tax and customs authorities.
In contrast, Indian states such as Jharkhand provide industrial land, electricity, and subsidised wages for one to two years, Iqbal Hossain said.
Bangladesh Plastic Goods Manufacturers and Exporters Association Vice President Quazi Anwarul Haque said incentives for non-bonded exporters have been reduced from 10 per cent to 8 per cent, with a proposal to cut further to 6 per cent.
After administrative and association costs of about 2 per cent, exporters effectively receive around 4 per cent, Ansarey said, adding that incentives should be linked to production rather than exports.
The government has designated plastics as a thrust sector, while Bangladesh Bank provides limited low-cost export credit.
“If port operations improve and the sector gets the same attention as garments, growth will continue,” said R N Paul.
