Following a promising surge in fiscal year 2022, Bangladesh witnessed a significant decline in furniture exports last year due to increased market competition. Nonetheless, local manufacturers remain optimistic about reversing this trend within the next five years and achieving export earnings comparable to those of garment shipments.
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To enhance their competitiveness on the global stage, they argue that obtaining a bonded warehouse facility is essential to offset the high import duties on raw materials, which currently range from 55 percent to 100 percent.
Salim H Rahman, chairman of the Bangladesh Furniture Industries Owners Association and managing director of Hatil Furniture, says in an article in The Financial Express that they aim to capture a larger share of the global market, but our products are priced out of competition. Rahman believes that implementing a bonded warehouse facility could lead to a significant increase in export earnings within the next five years, driven by robust international demand.
The global furniture export market is valued at approximately $328.64 billion, with China leading as the top exporter, earning around $139.48 billion annually. Bangladesh currently ranks 36th, exporting an average of $100 million worth of furniture per year.
Over the past five years, furniture manufacturers have been advocating for a bonded warehouse facility without success, Rahman noted in the article. Additionally, export cash incentives have been reduced from 15 percent to 10 percent.
'However, price competitiveness prevents us from entering the Arab market,' he adds in The Financial Express article: