According to a Reuters analysis, Europe has reported more than 1.6 million new coronavirus cases in the past seven days (reported on 1 November), which is nearly half the 3.3 million reported worldwide, with over 16,100 deaths.
The spiralling number of coronavirus positive cases, if at all, strongly points at what health experts have termed the ‘second wave’ of the pandemic, which has forced countries like France, Germany and the United Kingdom to announce lockdowns for at least the next month that are almost as strict as the restrictions in March and April, feel many while Portugal has imposed a partial lockdown and Spain and Italy are tightening restrictions.
Meanwhile, the US is also seeing a surge in cases, with at least 31 states across the country having reported at least one record-high day of new COVID-19 cases in the past month, according to data from Johns Hopkins University.
Fifteen states reported their highest one-day tallies of COVID-19 deaths, while the country’s 7-day average of new daily cases was 78,380 on 31 October, a number that has risen by 128.2 per cent since a post-summer surge low on 12 September.
Such a grim scenario in the two major apparel export destinations is, undoubtedly, a big worry for the garment exporters in Bangladesh, who are trying to get a strong foothold after the protracted business slump that followed in the wake of COVID-19 first sweeping the Western world.
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However, as per reports, which cited BGMEA, apparel makers have already made shipments of Christmas and winter orders to major buyers, who are expected to begin their sales from mid-November.
“We have to open discussions with apparel buyers and retailers so that they do not cancel work orders or stop new placements all of a sudden. We need an assurance from them that they will continue it till next January at least,” Dr. Sayema Haque Bidisha, Research Director at South Asian Network on Economic Modelling (SANEM) told the media earlier, while underlining that both the Government and entrepreneurs need to adopt strategies, given the new normal, to ensure apparel exports, that seem to be on rebound lately, continue.
European buyers continue to place new work orders amid COVID-19’s second wave because their online sales have increased significantly and they have kept their bricks-and-mortar shops open as well, reportedly underlined an official of a leading European brand on condition of anonymity, adding end customers’ buying habits have undergone a change on account of the pandemic, subsequent to which many are buying products from online stores instead of going to shops in person.
Though country-wise export data is not available yet for October, the July-September data shows that export to non-traditional markets suffered the most, while shipment to the EU and the US maintained stable growth; similar is the opinion of some industry insiders which indicates towards the fact that export reversals in the said period were not in the traditional export strongholds, as was feared.
But, the sudden change in scenario in Europe and USA lately has led the apparel exporters apprehending export setbacks, and thus, they are seeking 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 2-3 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 — are going for partial lockdown to contain further outbreak of the virus.
According to latest reports, Bangladesh’s exports plummeted over 4 per cent – export earnings declined by 4.08 per cent year-on-year to US $ 2.95 billion – in October as shipments of apparel products took a hit due to the Covid-19 pandemic even though data from Export Promotion Bureau released this Monday underlined overall export earnings in July-October of FY ’21 grew by 0.97 per cent to US $ 12.84 billion from what was US $ 12.72 billion in the same period of FY ’20.
The shipment of readymade garments, which typically contributes more than 84 per cent to the national exports, recorded a negative growth of 7.78 per cent in October even as in the 4-month period, exports declined 1.2 per cent to US $ 10.45 billion in FY ’21 from what was US $ 10.58 billion in the same period of FY ’20.
The shipment of woven items in the said period was down 7.76 per cent to US $ 4.64 billion even as knitwear export in the 4 months of this fiscal year registered 4.76 growth to fetch US $ 5.80 billion from what was US $ 5.54 billion in the corresponding period of last fiscal year.
However, export of woven items in October fell by 14.43 per cent while knitwear marked a decline of 2.19 per cent.
After recording a historic decline of 18.12 per cent in export growth in FY 2019-20 and the seven consecutive months of falling growth, shipments edged up to the positive territory in August and September, reportedly maintained BGMEA President Dr. Rubana Huq, while adding garment exports posted 7.78 per cent negative growth in October, highlighting the faltering recovery in global demand and trade.
“Since Europe has entered into a fresh wave of COVID-19 infection, and lockdowns are being declared in many countries, including France, Germany, Belgium and Greece, it would be difficult for us to cope up if the EU’s demand for clothing and its sourcing is troubled further…. This is worrying for us since Europe is our major market,” Rubana Huq further added.
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 while 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, reportedly,” said Rubana Huq, who went on add that with 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, added the BGMEA President.
“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,” she said, adding due to the worldwide outbreak of the pandemic, the global fashion buyers and retailers started cancelling orders since March this year.
Bangladesh faced held-up or order cancellations worth more than US $ 3 billion up to May and from June, buyers started reviving their cancelled orders.
Country’s apparel export was back on the positive track with the revived orders, but the second wave will bring further shock, said Mohammad Hatem, the first Vice President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).
“Negative impact of the second wave of Covid-19 in the US and EU has already started to affect Bangladesh as some buyers stopped ongoing negotiation for placing orders,” said Mohammad Hatem, who went on to express apprehensions that the orders for coming season will be decreased and the Government should continue its support to the sector for its survival.
It may be mentioned here that Bangladesh’s apparel exports in financial year 2019-20 declined by 18.12 per cent, or US $ 6.18 billion, to US $ 27.95 billion from US $ 34.13 billion in FY ’19 as the coronavirus pandemic hit the global business, as per EPB data which went on to underline that earnings from readymade garment products in FY ’20 registered negative growth for the first time in the history of the sector.
However, RMG export in the first quarter of FY ’21 gained a momentum as buyers revived their orders which had remained halted or cancelled due to the coronavirus pandemic.
So, going by what the latest reports suggest, this winter, things are going to be rather difficult for the Western world, the signs of which are already here for everyone to see. But, if it would have a profound impact on Bangladesh’s apparel exports, and if at all, what would be the magnitude of it are open to conjectures yet.