Exporters are a bundle of nerves now
Bangladesh's export earnings await an enormous blow in the coming months as the global coronavirus pandemic has wreaked havoc on orders and shipment while sending factories to a near standstill, exporters and experts said.
Earnings already took a hit in March, plunging 18.29 per cent year-on-year to $2.73 billion, due to a drop in shipments of major commodities like garment, leather and leather goods and frozen foods, according to the Export Promotion Bureau.
"The impact of the pandemic had not been reflected on the export figures of March as those were predicated on the shipments made earlier," said Ahsan H Mansur, executive director of Policy Research Institute.
The coronavirus outbreak started affecting production from the beginning of April when almost all of the commercial units in Bangladesh were turn off.
Mansur's observation was aligned with the results between April 1 and April 15, when apparel exports nosedived 83.74 per cent to $194 million from a year earlier, according to data from Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Shipment of garment, which makes up about about 84 % of Bangladesh's total exports, declined 26.70 % year-on-year to $1.97 billion in March.
The pandemic started affecting apparel export because so many retailers kept their shutters down in america and Europe, and cancelled work orders worth more than $3.11 billion up to now. The worst-affected countries such as for example Italy, the UK, the US, France, Spain and Germany will be the prime destinations of Bangladeshi garment items.
The US imports apparel items worth $6 billion a year from Bangladesh, while Germany also sources almost the same amount. The united states exports about $3 billion worth of garment what to Italy and the united kingdom each, and $2.5 billion to Spain and France each.
Under the present circumstances, Mansur said Bangladesh should keep exporting its products, if necessary, on a limited scale, as there is a demand for Bangladeshi products in the international markets.
Bangladesh can resume production at its factories after April 25 by firmly taking appropriate safety measures as much countries like Spain and China have opened their factories and markets, he added.
Saiful Islam, president of the Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh, said international buyers have cancelled work orders worth $316 million up to now.
Shipment of leather and leather goods, the second biggest export industry after garments, fell 10.78 % to $688.51 million in the July-March amount of the fiscal year, as the sector fetched a total of $1.02 billion in fiscal 2018-19.
"We will face further challenges in the international markets as our rivals like China, Vietnam and Cambodia are opening their factories gradually," Islam told The Daily Star over the phone.
Since the factories in Bangladesh are closed now, buyers aren't even inserting any queries, he said, adding: "So, the future is bleak for the sector."
The full total export receipts in March were 28.61 % short of the monthly target at $3.82 billion. The entire exports earnings fell 6.24 % year-on-year to $28.97 billion during the July-March amount of the fiscal year. The amount is 14.52 % below the periodic target of $33.89 billion.
During the period, the shipment of frozen foods declined 3.91 % to $402.6 million, agricultural products 0.1 % to $721.98 million, terry towel 29.12 % to $30.04 million and home textile 7.59 % to $598.19 million.
However, the shipment of jute and jute goods rose 23.49 % to $775.63 million, pharmaceuticals 6.50 per cent to $106.22 million and footwear 25.17 per cent to $242.07 million.
