Foreign buyers have already canceled 15 to 30 percent of the export order due to Coronavirus impact
Many global brands have urged manufacturers worldwide to stop shipments within one slide due to the outbreak of Coronavirus in their Bangladeshi clothing makers. Various companies, including the Asian Development Bank, the UN agency have warned that the global Corona outbreak will hurt the economy, including Bangladesh’s trade.
BGMEA President Rubana Huq and the garment industry owners’ organization of Bangladesh, told the media on 13 March that foreign buyers had already canceled 15 to 30 percent of the export order.
“This will have serious consequences as we see an imminent liquidity crisis that will cause financial disruption for the manufacturing units,” said Rubana Huq, President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
International brands were cutting off their orders and asking manufacturers not to make clothes until further orders, and those who were producing them were told to stop running because global use has stopped. Apparel manufacturers and exporters have expressed deep concern over the cancellation of orders saying that “just before the EID festival, garment exporters should also give a bonus” will be tough, as exports declined.
In the first eight months of the current fiscal year until February Bangladesh’s garment exports achieved negative growth of 5.71 percent, are expected to decline further. The deadly outbreak of Coronavirus in Europe has forced consumers to stay home. But the outbreak of Coronavirus is not visible to Bangladesh yet. So, the reason behind the cancellation of orders is not Bangladesh.
Donald Trump, President of the United States of America, already declared a national emergency in 12 states. Canada’s Prime Minister Justin Trudeau begins 14-day self-isolation. European markets recover some ground after heavy losses. In this crucial period, sales of international brands has been reduced. Low sales will create a mass amount of inventory which bears a lot of cost for brands and Bangladeshi apparel exporters facing difficulties for cancellation of orders. Bangladesh is the neighbor of China which is creating a major misconception for international consumers.
Shahidul Haque Mukul, Managing Director of Adams Apparels, got an order cancellation recently, Rezwan Selim who produces sweaters at his Softex Cotton Private Limited for export to Germany and France, has seen his buyers shifting orders to Turkey and one of the buyers of Inamul Haq Khan, Managing Director of Ananta Garments from the USA had readjusted his orders. His export shipments to China have also remained halted for over a month.
BGMEA leaders have met with the Prime Minister’s Private Industries and Investment Advisor Salman F Rahman on the current business situation in Bangladesh regarding the business situation and possible steps to meet the challenges due to the outbreak of Coronavirus worldwide.