Bangladesh’s apparel industry, which contributes to over 80 per cent of the nation’s total export, is facing an uncertain future following the Covid-19 pandemic.
The industry has already lost $6 billion export revenues due to cancellation or suspension of orders from some of the world’s largest brands and retailers.
The cancellation of orders was the result of the lack of demand from the US and European markets, following the closure of hundreds of shops, owing to the pandemic-centric lockdown.
The pandemic also forced local apparel manufacturers to suspend their production for one month in April causing drop in shipments further.
Consequently, apparel export from Bangladesh declined by 18.45 per cent to $27.83 billion in the last fiscal year. Export earnings from the sector were $34.13 billion in the 2018-19 fiscal year.
“Overall situation of the industry is still appalling as the pandemic reduced clothing demand worldwide,” former BGMEA President Abdus Salam Murshedy, MP told The New Nation recently.
He said we are receiving insignificant numbers of fresh orders which are not sufficient to run the industry with full capacity. Even buyers are offering price cut to the tune of 10-15 per cent while placing new orders.
“In this situation the owners of readymade garment factories in Bangladesh have sought more pandemic bailout funds from the government to pay the workers for three months from August,” noted Murshedy.
Industry insiders said the local apparel industry was passing through a critical time during pre-Covid weathering global economic slowdown and now the pandemic severely hurt it operation owing to global demand fall.
The number of operational factories under the BGMEA was 2,200 but it came down to 1,875, while factories under BKMEA were 850 and now it deduced to 720, meaning 455 apparel manufacturing units have been closed after failing to withstand internal and external shocks.
“After sharp decline, apparel exports got back on track during July-August period of the current fiscal year as global buyers reinstated their orders in view of improving situation of coronavirus pandemic, BKMEA Vice-President Mohammad Hatem told The New Nation recently.
Bangladesh earned $3.24 billion from apparel shipment in July and the export receipts was 14.18 per cent higher than the monthly target of $2.84 billion.
Besides, its apparel export totaled US$3.23 billion in August 2020, up from US$2.23 billion during the same period in 2019, showing about 45 per cent year-on-year growth, according to Bangladesh Customs’ data, collected by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
“Basically we are exporting apparel products ordered in March, April and May and thus led to export growth in July and August. But we are not sure the performance would continue as the global market has not yet recovered from the Covid-19 pandemic,” said Mohammad Hatem.
He said though situation was improving, no one can say when it will get back to normal. Even, we have not resumed production in full swing due to lack of adequate order.
“The industry is in big crisis and we will not be able to overcome the crisis without government policy support. If we get easy loans to pay the workers until October, when the sales in Europe and the US are expected to pick up ahead of Christmas,” said Mohammad Hatem.
