Bangladesh apparel exporters fear new crisis amid second virus wave

Moinul Haque | Updated at 07:36pm on October 30, 2020

Bangladesh’s apparel exporters fear a fresh setback due to the second wave of the coronavirus pandemic in the western countries and sought support from the government to face the imminent shock.

Exporters said that the export-oriented readymade garment industry was on a recovery track in the last two to three months with a compromised price level but the second wave would slow the export orders as the major markets in EU — France, Germany, Spain and Italy — were going for partial lockdown to contain further outbreak of the virus.

Due to the massive second wave of the coronavirus spread, the authorities in Germany, France, Spain and Italy have already decided to go for a partial lockdown.

Germany is going to shut bars, restaurants and theatres from November 2-30 and shops will be allowed to operate with strict limits on access.

Under the new French measures, people will be required to stay in their homes except to buy essential goods, seek medical attention, or exercise for up to one hour a day, according to the global media report.

‘Of course we are worried and we have to observe the situation with caution. Volume wise the sector was on a recovery track in the last 2-3 months, but at a  compromised price level,’ Bangladesh Garment Manufacturers and Exporters Association president Rubana Huq told New Age on Thursday.

She said that due to the second wave of the pandemic in the western countries, the volume might drop as well, buyers might hold back placing new orders — meaning factories might end up with idle capacity after they had already been in a weak financial position after sustaining price hits. This might give rise to a situation which would be extremely difficult for the industry to cope with, she added. 

‘We have witnessed a sharp decline in prices of apparel products. As per the data of NBR the price decline of apparel exported from Bangladesh to world during January-September of 2020 on a year-over-year basis is 2.17 per cent, and the decline in September alone is 5.23 per cent,’ Rubana said.

Due to the worldwide outbreak of the pandemic, the global fashion buyers and retailers started cancelling orders since March this year.

Bangladesh faced halt or order cancelation worth more than $3 billion up to May and from June buyers started reviving their cancelled orders.

Country’s apparel exports was back on the positive track with the revived orders, but the second wave will bring further shock, said Mohammad Hatem, first vice-president of Bangladesh Knitwear Manufacturers and Exporters Association.

‘Negative impact of the second wave of COVID-19 in the US and EU has already started to affect Bangladesh as some buyers stopped on-going negotiation for placing orders,’  said Hatem, also managing director of MB Knit Fashion Ltd.

He said that the orders for coming season will be decreased and the government should continue its support to the sector for its survival.

‘We are in fear of a slowdown in receiving work orders due to the second wave of the pandemic in the US and the European Union,’ Md Fazlul Hoque, managing director of Plummy Fashions Limited, said.

‘Some of the EU countries are going for partially lockdown to contain the second wave of the virus but I think the world will not go for full lockdown again,’ he said.

Fazlul Hoque said that the country’s readymade garment exporters were running their units on loan and the government would have to continue support to the sector realising the global situation.

Bangladesh’s apparel exports in financial year 2019-20 declined by 18.12 per cent, or $6.18 billion, to $27.95 billion from $34.13 billion in FY19 as the coronavirus pandemic hit the global business hard, According to the EPB data.

As per the EPB data, earnings from readymade garment products in FY20 registered negative growth for the first time in the history of the sector.

RMG export in the first quarter of FY21 gained a momentum as buyers revived their orders which had remained halted or cancelled due to the coronavirus pandemic.

Earnings from RMG exports in the first three months of FY21 grew by 0.85 per cent, or $8.12 billion from $8.05 billion in the same period of FY20, official data showed.