The COVID-19 pandemic has created a disruption in the global fashion apparel demand causing a plunge in apparel prices and markets shrink. The negative impact is severely impacted by the apparel manufacturing countries, especially in Bangladesh. According to the Export Promotion Bureau (EPB) data, earnings from Bangladesh Knitwear garments export for July-May of FY 2019-20 is USD10.89 billion, which is a 5.17% decline.
According to the exporters country’s RMG sector is struggling as both the demand and prices of apparel products decreased in the global market due to coronavirus pandemic.
At the same time, woven products export down by 14.31% and the country’s overall export has declined by 14.08% ($24.47 billion) compared to last FY.
|Table: Monthly knitwear export performance (Values in Million US Dollar)
Source: Data from EPB; compiled by BKMEA (R&D); *Point to Point, **July-February
|P2P* Changes (%)|
Rubana Huq, President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said, “New orders are being issued but they are at least 40% to 45% lower compared to last year.”
Still now, after forceful negotiation with the buyers, a slice of the $3.15 billion worth works orders that were canceled due to the COVID-19 pandemic has been restored.
“Finally, the local garment industry will have to face damages amounting to $5 billion. So, we will continue to try and push the buyers for payments,” Huq added.
“The exports may plummet by 30% to 40% in the upcoming months since the retail market is yet to rebound. The impact of the COVID-19 on consumers’ behavior is still unknown and our factories are still struggling with cash flow and credits to make a turnaround. We are still in many uncertainties and changes to foresee future trends,” continued Rubana Huq.
All the export markets experienced fall between 8 percent and 22 percent and unit value decreased by 0.90 percent from the US and 1.87 percent from the European Union during the pandemic.
Citing a study conducted by McKinsey, Rubana Huq said that COVID-19 would wipe off $297 billion from the global apparel value in 2020.
The Bangladeshi RMG suppliers came up with much needed personal protective equipment (PPE) and protective masks for the global markets.
“The BGMEA board is encouraged to see how factories are adopting innovations at workplaces to better ensure the prevention of the spread of the virus,” she said.