Bangladesh’s apparel sector has started feeling the pinch of the coronavirus outbreak as foreign currency receipts from the country’s largest export earning sector has begun to decline.
Manufactures and exporters fear that the situation would get worse in the coming months, seriously hurting the apparel sector.Data from the Export Promotion Bureau (EPB) suggest that exports of readymade garment items declined by 5.53 per cent year-on-year, which is 13.45 per cent lower than the target set for the July-February period.
During the July-February period of 2019-20 fiscal, apparel exports came down to $21.84 billion from $23.16 billion in the same period last fiscal.
Of the total RMG exports, shipments of knitwear products declined by 5.17 per cent while exports of woven goods fell by 5.88 per cent in the first eight months of FY 20.
If the coronavirus crisis lingers further, the entire apparel industry will plunge into a deep trouble, sector insiders said.
“Prices of all accessories including yarn and sewing thread are going up. Price has jumped by almost 50 per cent in many cases,” said BGMEA president Rubana Huq.
She also predicted that if regular shipments from China do not resume within the next two weeks, the garment manufacturers will not be able to procure any trim properly as much of the raw materials come from China.Rubana Huq said most of the raw materials for the RMG sector like yarn, sewing thread, paper and plastic items (button), twill tape, and even dyeing, are getting costlier.
“In general we are possibly going to take a hit for 3-4 month,” she added.
The BGMEA president also said the coronavirus is also predicted to have a certain impact on the industry in terms of delay in imports, production, shipment, cash flow crisis, and a slump in retail sales.
“Therefore the time is extremely challenging for now at the moment, and all we need to do is to make sure that the factories survive and sustain in this critical time. And there is no better time than now to support the sector for its survival,” she added.
The apparel sector imported raw material worth $5.02 billion in 2018-19 fiscal and imported 40 per cent machinery from China.
Md. Siddiqur Rahman, Chairman of Sterling Group, said the supply chain has already been disrupted due to the coronavirus outbreak and if the volume of export orders starts to drop, apparel makers will have to go through a tough time in next couple of months.
It is already quite bad as some of the key export destinations for Bangladeshi apparel products have already been affected by the outbreak, said Md. Siddiqur Rahman, also a former president of BGMEA.
“We have been facing export slowdown from the very beginning of this fiscal and the coronavirus outbreak will make the situation even worse,” he said.
Ahsan H Mansur, executive director of Policy Research Institute (PRI), said they are predicting a major shake in the country’s export portfolio due to the coronavirus outbreak.
“Export is going to hit hard in next March and April,” said Ahsan H Mansur.
He also said there is no alternative to sourcing raw materials from China, that’s why it will be more challenging to meet the export orders.