$1B Soybean Trade Deal Signed Amid Rising Cotton Costs
Bangladesh is enhancing its agricultural trade relationship with the United States underlining two significant developments—a $1 billion soybean purchase commitment and increased US cotton exports. On November 5, 2025, stakeholders from both countries convened in Dhaka to discuss boosting US cotton in Bangladesh’s import basket.
$1 Billion Soybean Trade Deal Signed
The US Soybean Export Council (USSEC) inked a landmark agreement with Bangladesh’s leading soybean processors. This accord involves Meghna Group, City Group, and Delta Agro, alongside separate deals with Mahbub Group and KGS Group. Over the next year, these Bangladeshi companies will source American soybeans, significantly increasing US exports to Bangladesh.
US Chargé d’Affaires Tracey Jacobson celebrated this agreement as evidence of Bangladesh’s growing role as a vital market for high-quality American agricultural products. This deal is set to triple US soybean exports to Bangladesh, representing one of the largest purchases in the country’s recent history.
Challenges in Cotton Trade
Despite this positive momentum in soybean trade, challenges remain in sourcing US cotton. Currently, US cotton represents about 10% of Bangladesh’s total imports, a decrease from previous years. Key issues include price differentials and longer shipping times, which have made US cotton less competitive compared to suppliers from India and African nations.
Price and Lead Time Concerns
- US cotton costs approximately $0.12 more per kilogram than alternatives.
- Longer lead times further exacerbate the challenges for Bangladeshi importers.
KM Rezaul Hasanat, managing director of Viyellatex Group, emphasized that even a slight price difference poses difficulties for importers. Additionally, garment buyers in the United States do not provide additional compensation for products made with US cotton, leading importers to favor cheaper sources.
Calls for Incentives
Bangladeshi representatives urged US brands to offer better prices for garments made with American cotton. They also proposed preferential trade benefits under a Reciprocal Tariff framework, which could lower tariffs for Bangladeshi products if at least 20% of their materials are sourced from the US. However, legislative approval is still pending.
Despite these hurdles, Bangladeshi textile leaders acknowledged the superior quality of US cotton as a potential advantage, although it does not entirely offset the price difference.
The Path Forward
Industry experts suggest that establishing a dedicated warehouse for US cotton in Bangladesh might alleviate some sourcing costs. This arrangement could enable faster purchases and lower overall expenses for importers.
As Bangladesh and the US deepen their agricultural trade ties, both opportunities and challenges persist. The growing soybean trade signals a positive shift, while the cotton sector continues to navigate price and logistical complexities.
