The impact of buyers cancelling orders or demanding price cuts was again brought to the fore by a recent report of the Center for Global Workers Rights (CGWR) at Penn State University, USA.
As per the CGWR, retrospective price cuts and order cancellation by buyers on account of the coronavirus pandemic has caused suppliers in Bangladesh loss of US $ 724 million in 4 months in US alone.
In a research brief, the CGWR while underlining that brands delaying payments and demanding price cuts would render millions of workers in supplying nations like Bangladesh jobless, before going on to add that more than 1 million workers have been adversely affected in Bangladesh.
Many workers in Bangladesh were sent home without furlough pay or severance, the CGWR brief reads.
Titled ‘Unpaid Billions’, the CGWR report underlined that instead of a potential growth, compared to US $ 533 million in the same month the previous year, Bangladesh apparel exports to US market declined to US $ 524 million in March while adding that brands’ refusal to pay for goods they asked suppliers to make resulted in prices and order volumes plummeting through June.
Trade data from the European Union and the USA show evidence of a significant loss in value due to order cancellations in the said 4 months, the report added.
The research, analysing suppliers’ leaked correspondence with buyers or their accounts, found retroactive price discounts, cancellation of orders even after making of products and postponement of payment and delivery.