Entrepreneurs of the readymade garments (RMG), the country’s main export earning sector, fear another stagnate situation in the sector on account of the second wave of the ongoing pandemic is developed across the world. The sector insiders said that the international buyers are either refraining from placing orders, or delaying to take decisions or demanding steep price cuts fearing another shut down due to second wave of the pandemic. According to the Export Promotion Bureau (EPB), export earnings grew by 2.58 per cent to $9.89 billion in first quarter of the current fiscal year super seceding the performance in last fiscal. RMG exporters said the growth was not for new orders, but it was for the reassured orders which were suspended after the fallout of the Covid-19 in February-March in this year. Md Mohiuddin Rubel, Director of the BGMEA, told The New Nation, “We are observing the situation cautiously. If the second wave of the ongoing pandemic worsens the situation and the foreign markets shut down, it will be very tough for us to survive.” “Many garment factories have already been closed. Many have cut at least 20 percent of their workforces as the sector is passing hard time,” he added. He further said, “We expected additional orders ahead of the Christmas Day, but that it didn’t happen.” Shahidullah Azim, a garment factory owner, laid off 20 per cent of his workers in the wake of the first wave of the Covid-19 pandemic. But he sees an unprecedented crisis due to the second wave developed in Europe and the United States. “This is a disaster. We are taking orders just to survive,” said Mohammad Hatem, Vice-President of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). “RMG sector witnessed another stagnation situation due to the second wave of the pandemic,” said Hatem, also Managing Director of MB Knit Fashion Ltd. He further said maximum factories are using 60 per cent of their capacities as many customers are demanding price cuts of as much as 15 per cent, making the recovery that much harder. There was a rebound of less than 1 per cent in the July-September quarter, thanks to a surge in demand for knitwear items, which account for half of Bangladesh’s total garment exports.
But nearly half of factories producing knitwear products like t-shirts and sweaters are finding it difficult to keep open, said Hatem. “A second wave could further delay the recovery in the sector,” he added. Low wages have helped Bangladesh build its garment industry, with some 4,000 factories employing four million workers. Readymade garments are a mainstay of the economy, contributing almost 16 per cent of country’s GDP, according to the Bangladesh Bank.
