Home Apparel RMG order cancellations, suspensions cross $3b

RMG order cancellations, suspensions cross $3b

The value of readymade garment export orders cancelled or put on hold by global buyers due to the worldwide coronavirus outbreak exceeded $3 billion till Monday, exporters said. They said that almost all global buyers were cancelling or holding shipment of their orders every day, putting uncertainty on the upcoming orders. According to the Bangladesh Garment Manufacturers and Exporters Association data, 1,041 RMG factories on Monday informed the trade body that they received cancelation or shipment delay notices from the buyers for the export orders worth $2.87 billion. BGMEA officials said that it was the picture of only 1,041 factories and many other manufacturers were yet to report to the trade body about the issue. They said that the exact figure of cancelled or delayed orders would be higher than $3 billion. There were plenty of goods which remained in different stages of production or produced already at the factories and ready to be shipped, but due to buyers’ embargo manufacturers could not ship those items, exporters said. Citing BGMEA data, the Associated Press reported that $1.8 billion in orders had been put on hold and another $1.4 billion had been cancelled.It said that cancellations of planned orders, for April-December, amounted to nearly $1.7 billion. ‘Such goods are already financed by the factories, including wages of the workers to be paid. We want these goods to be accepted by the buyers as per schedule and make the payments immediately,’ Mostafiz Uddin, managing director of Bangladesh Denim Expert Ltd, told New Age. He said that there were confirmed orders from buyers for which factories had stocked raw materials in houses but could not start production. ‘At this stage, it is difficult for us to absorb the shock since our operation is based on a cycle of current and upcoming orders which we always finalise and make preparations and allocate our production capacity accordingly,’ Mostafiz said. He said that the sudden cancellation of orders would result in tremendous financial losses since the manufacturers could send their workers home without payment. ‘A partial payment is most logical if we call it responsible purchasing because it will be used to pay wages of the workers,’ Mostafiz added. 

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