As Bangladesh faces an economic crisis due to the closure of its manufacturing units in these challenging times, many international clothing brands that had agreed not to cancel orders are now demanding price cuts of up to 50 per cent from Bangladeshi manufacturers.
Dr. Rubana Huq, President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said “We are still observing their departure from original contract terms, which includes renegotiating prices as low as 50 per cent of the original deal.”
Dr. Rubana also said that no brand in the country, except H&M, has come out clearly with regard to their plans about delivery and payments. Most brands are resorting to deferred payments, discounts and deferred deliveries.
As many brands face financial woes due to lockdown, many have begun cancelling previous orders. However, some have stepped up to collect the delivery of orders already made.
In the first half of April alone, exports fell by 84 per cent as orders worth over US $ 3 billion were cancelled or suspended. Over 4,000 factories in the country employ around 4 million workers, mostly rural women, who now find themselves either jobless or uncertain about their jobs.
The Ministry of Commerce has expressed concerns that despite adhering to compliances and putting in efforts for a safe work environment, factories are not able to negotiate a better price.
The Government announced a US $ 588 million package to help the crucial export sector pay its workers last month.
