Exports from Bangladesh, especially RMG products, are experiencing a sharp decline due to order cancellations triggered by border restrictions that different governments have imposed to stem the ongoing coronavirus pandemic that has spread across the globe.
Governments one after another are resorting to border closure, suspension of air communications and restriction of people’s movement in an effort to contain the spread of the lethal virus.
Supermarkets and educational institutions are being shut down besides cancelation of different global events and conferences.
The restrictions are hitting hard the country’s trade, especially export while the import is already in a jeopardy.
Economists are apprehending drastic fall in revenue collections since both import and export of the country are gradually coming to a halt.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Rubana Huq said at least 20 buyers from different parts of the world have cancelled orders placed earlier to different garment manufacturing companies.
If this situation deteriorates further, the country will certainly face a major crisis, she added.
The owner of a leading garment factory of the country, on condition of anonymity, told Bangladesh Post, “Garment owners are going to face huge losses this month as big orders are being cancelled one after another.”
He said with the rapid deterioration of global coronavirus situation, some garment owners are considering shutting down their factories.
In reply to a query over the potential factory closure, BGMEA Vice-President SM Mannan (Kochi) told Bangladesh Post, “This is a global problem. If buyers cancel orders, factory owners are then forced to consider such step.”
“But, BGMEA is holding meetings one after another to sort out what to do to tackle the situation,” he continued, “We are contemplating discount to attract buyers. Otherwise, factory owners would not be able to get back the production cost even, let alone making profit.”
“We’ve informed the government of the gravity of the situation. We’re looking forward to a fruitful decision from the government to tackle the crisis.” he added.
According to sources concerned, if the global coronavirus situation deteriorates further, more and more European countries will also shut their borders, prompting further order cancellations.
Such cancelation will surely deal a heavy blow to the country’s export sector, they said.
Already, pandemic situation in Spain and the UK are following the footsteps of Italy which has been forced to countrywide lockdown to stem the rapid spread of the virus.
BGMEA President Rubana said, “Certainly, we’re going to face challenges during the upcoming Ramadan and Eid. We’re expecting government’s support in this regard.”
Some exporters, however, claim that none of their buyers, including top European brands H&M, has cancel any order. “Still we’re are closely monitoring the situation,” said one exporter.
The Asian Development Bank (ADB) recently said in a report that the potential damage to Bangladesh's economy, inflicted by coronavirus pandemic, could be as high as $3.21 billion which is equivalent to Tk 25,600 crore, equal to 0.1 percent of Bangladesh's gross domestic product (GDP).
Dr Khondaker Golam Moazzem, Additional Research Director of Centre for Policy Dialogue, told Bangladesh Post, “Exporters should talk to their respective buyers to convince them to take products even if at a discount.”
He said the government should prepare a sector-based budget for the coming days, not only for RMG but for other sectors, to cover the loss inflicted by the pandemic.
Based on minute calculation, the government can provide financial aid to the affected traders through different banks, he added.
Moazzem laid stress on checking spread of the virus in the country at any cost. “Many foreign countries are closing their boarders being hit by the pandemic. Our export is tumbling. If number of infections in the country rise in big numbers, it will be a catastrophe for us.”
