How Global Buyers Shape Bangladesh’s Garment Prices Amid Currency and Transport Shocks

Bangladesh’s garment exports are heavily shaped by the power of a few multinational buyers, who use their market dominance and preference for faster air freight to shield themselves from exchange-rate shocks. As a result, currency fluctuations affect local exporters unevenly, reinforcing the sector’s dependence on buyer-driven logistics and pricing dynamics.

A new working paper from the Asian Development Bank’s Economics Working Paper Series, authored with researchers from the University of Naples Parthenope, the Asian Development Bank’s Economic Research and Development Impact Department, and the University of Lisbon ISEG, offers a rare, deep look into the hidden mechanics of Bangladesh’s garment exports. Using millions of customs transactions recorded between 2018 and 2024, the study shows how a handful of multinational buyers shape everything from export prices to transport choices, and how these dynamics determine the industry’s resilience during currency shocks.

A Geography Built Around Two Gateways

The authors highlight an extreme spatial concentration of Bangladesh’s export economy. Nearly all garments leave the country through just two gateways: Chattogram port and Dhaka airport. This narrow geography spills over into the structure of transport decisions, with maritime shipments overwhelmingly routed through Chattogram and air freight dominating in Dhaka. Crucially, the paper finds that these choices are rarely made by Bangladeshi exporters themselves. Instead, global buyers dictate the terms under which goods are shipped, including the mode of transport, the cost responsibilities, and the associated risks. As a result, the logistical backbone of Bangladesh’s most important export industry is directly tied to the preferences and priorities of foreign firms.

A Few Giants at the Helm

Bangladesh’s garment exports are heavily concentrated among a limited number of international buyers whose purchasing power gives them substantial influence. Leading brands such as H&M, Inditex, Primark, and Marks & Spencer command significant market shares and exert strong bargaining power over local suppliers. Their sourcing patterns differ widely: some buyers rely heavily on air freight to meet rapid turnaround and fashion-cycle demands, while others prioritize lower-cost, slower-moving sea shipments. These differences reveal the varied operational models of global retailers and explain why suppliers selling identical garments may receive markedly different prices depending on whom they sell to. The study shows that price dispersion is not simply a reflection of product differences but an outcome of negotiation power and long-standing commercial relationships.

Exchange-Rate Shocks and the Shielding Power of Market Strength

When Bangladesh allowed its currency to float away from a de facto dollar peg in 2022, the resulting depreciation provided a natural test of how exchange-rate volatility filters through the garment value chain. On average, a weaker taka should make Bangladeshi exports cheaper in foreign currency terms but more expensive when measured in taka. Yet the study finds that the effect is far from uniform. Large international buyers are able to cushion themselves against these shocks; their long-term relationships and substantial market shares allow them to renegotiate or adjust markdowns in ways that insulate them from immediate price increases. Smaller buyers, in contrast, experience a higher degree of pass-through, leaving Bangladeshi suppliers more likely to raise prices when the currency depreciates.

Transport mode plays an equally important role. Buyers whose supply chains depend more heavily on air freight, which offers speed and reliability, face lower pass-through from exchange-rate fluctuations than those relying primarily on sea transport. Air freight allows faster inventory cycles and reduces exposure to delays, giving buyers leeway to resist seller-driven price adjustments that would otherwise occur during currency volatility. After the 2022 depreciation, some buyers shifted further toward air transport, especially for high-value products and shipments destined for more affluent markets where the higher logistics cost is justified.

A Sector Ready for Reinvention

Taken together, the findings portray a garment sector deeply entwined with the strategies and power structures of global retail. Bangladesh’s exporters operate within an environment where foreign buyers influence price setting, delivery schedules, and risk allocation. As the country prepares to graduate from least developed country status, bringing an end to certain trade preferences, this dependence poses real vulnerabilities. The study’s insights underscore the need for policies that strengthen local firms’ bargaining positions, broaden logistics infrastructure, and enhance resilience to external shocks. For a sector that has powered Bangladesh’s economic rise, understanding these dynamics is essential for navigating the challenges ahead.