As Coronavirus cases continue to surge, Bangladesh is entering into a strict and sort of all-inclusive lockdown from 23 July for a period of 14 days.
Unlike the previous lockdowns, this time around, there are apparently not much of exceptions. According to reports, in a notification issued by the Cabinet Division, the leather sector, food, drug and PPE makers have reportedly been exempted from lockdown, with no other exemption for any other industry/sector till the time of filing of this report, which effectively means the food and food-producing or processing industry, sectors related to the transportation, preservation, and processing of rawhides and industry related to producing medicine, oxygen and protective materials needed to prevent COVID-19 have so far been put out of the purview of the lockdown.
So, as of how things stand presently, the hectic parleys by the garment makers to allow the garment factories to operate during the lockdown seem to have failed to achieve the desired result as the Government has effectively turned down the appeal of apparel and textile sector leaders to allow operation of their export-oriented factories during the ‘strict Covid restrictions’ from 23 July to 5 August.
The decision by the Government comes at the back of some good export performance, which if at all, is indicative of the fact that things are slowly but surely coming back on track as far as exports are concerned.
It may be mentioned here that despite the protracted COVID-19 glut, Bangladesh’s export earnings made a strong rebound in the just-concluded fiscal year, fetching US $ 38.75 billion, thanks to revival of apparel shipments.
According to the EPB, compared to export earnings of US $ 33.67 billion in FY ’20, export earning in FY ’21 has been US $ 38.76 billion, growing by 15.10 per cent even as apparel export grew by 12.55 per cent in FY ’21 to US $ 31.45 billion from what was US $ 27.95 billion in FY ’20 (export earnings from woven garments in the just concluded financial year 2020-21 increased by 3.24 per cent to US $ 14.49 billion from US $ 14.04 billion in FY ’20 while earnings from knitwear export in FY ’21 grew by 21.94 per cent to US $ 16.96 billion from US $ 13.90 billion in FY ’20).
Further, for the current fiscal year, as perhaps should have been expected, Bangladesh has set a target to export US $ 51 billion worth of merchandise and services — the new target was announced by Commerce Minister Tipu Munshi recently during a virtual meeting with exporters, Government officials, manufacturers and business chamber leaders even as it underlined this export target is 12.37 per cent higher than the one attained in the immediate past (2020-21) fiscal year — even as the Commerce Minister underlined that the Government before setting the export target, considered some aspects, including situation in major export markets, Coronavirus pandemic’s fallouts on local and global businesses, global garment supply chain and the Government’s policy supports (including financial ones) and goods diversification.
Like the previous years, apparel items are expected to comprise bulk of the merchandise again this time too.
In the given backdrop, keeping the apparel sector shut during the lockdown could very well come at a cost, at least so are the apprehensions.
As per reports, brands and buyers have already started to put work orders on hold citing uncertainty.
…buyers have been asking me frequently how the work orders would be executed as the lockdown is going to be imposed, reportedly underlined Managing Director of Chittagong-based Denim Expert Mostafiz Uddin, speaking to the media, adding, “I am scheduled to send US $ 1 million worth of goods on 1st and 5th August. If the lockdown continues, I cannot send those goods and my buyers have already said they will not give me a time extension anymore.”
It may be mentioned here that the months of July and August are very important for the industry as this is the peak season for sending goods for the upcoming winter season and Christmas sales and for placing work orders for the next summer season.
Given the existing situation, there are fears buyers might shift orders to alternative destinations if suppliers in Bangladesh cannot cater to the requirements in time.
Meanwhile, interacting with the media, BGMEA President Faruque Hassan reportedly underlined that many international retailers and brands have either been sending messages or making phone calls and sending mails to know what would happen over the lockdown as they were very worried about their supply of goods.
“No buyer has cancelled work orders until now as no BGMEA member has complained about it. However, a lot of the members have been complaining to me about the placement of work orders by the international retailers and brands,” reportedly maintained the BGMEA Chair, who went to explain that buyers who were supposed to place orders for one million pieces of T-shirts are now seeking half of it as uncertainty prevails over production due to the lockdown.
Although the buyers were not cancelling work orders up until now, if uncertainty prevails, the situation might prompt them to go for cancellations in the near future, Faruque expressed apprehensions.
Meanwhile, speaking to the media, Fazlee Shamim Ehsan, the CEO of Fatullah Apparels reportedly said that fearing shipment disruptions amid the lockdown, many of his buyers have asked him to send goods through air freight.
If I have to do that, I will suffer a big loss, said Shamim, adding that otherwise, on the other hand, buyers may demand a discount if any exporter fails to send goods on time even as DBL Group Managing Director MA Jabbar on his part maintained that buyers have emailed them to ship goods on time.
If we fail to send products timely, they will face big losses as they have dependency on us…, reportedly stated Jabbar even as the exporters are holding on to hopes that post Eid and considering the ground realities, the Government could rethink its decision and may allow the industry to resume production considering the overall ramifications, which might prove to be the saving grace for the industry, maintained the industry insiders, to end on a positive note.