Bangladesh’s apparel exports have registered a 2.15% year-on-year negative growth in the first 21 days of December.
During that period, the readymade garment sector raked in $2.49 billion in contrast to $2.54 billion in the same period of the last fiscal year, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Out of the 21 days in December, the sector saw a negative growth for 13 days and a positive growth for eight days. During that time, the apparel sector enjoyed a whopping 327% year-on-year growth in a single day while it witnessed 51% negative growth in another one, according to the BGMEA data.
The BGMEA came up with the estimation based on data from the National Board of Revenue (NBR) as the Export Promotion Bureau is yet to make the official announcement in this regard.
Industry insiders said the apparel export receipts went down due to the inflation in the sector’s major export destinations, fueled by the ongoing Russia-Ukraine war.
The garment export earnings dropped suddenly in September after a long stretch of growth for the previous 13 months. Then it bounced back in October and November this year as some buyers received their deferred shipments of goods during that time.
Talking to The Business Standard, BGMEA Vice President Shahidullah Azim said the slowdown of apparel shipments was expected this year as most factories have been receiving less work orders compared to previous years.
He also expressed fear that it might continue till April-May next year, adding that, “We are getting inquiries from buyers but the prices they have been offering were not acceptable.”
Nipa Group Managing Director Khosru Chowdhury said, “We are running factories at 90% capacity. Garment prices have fallen about 3-4% compared to last year.”
He said the prices of raw materials like yarn have fallen, but that is hardly enough to make any profit for most of the factories.
Khosru Chowdhury, a BGMEA director, told TBS that usually he receives a number of orders by December every year that keep his factory occupied for the next six-seven months, but this year he received no orders after April.
Mohammad Hatem, executive president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told TBS that the data of the first 21 days of this month reflects the actual scenario of the sector.
He said the exporters are facing many challenges to run their units. If the central bank does not provide policy support to not classify their loans till June next year, then many factories will be forced to shut their production.
He also said about 90% of apparel exporters have been struggling to pay the workers’ salaries regularly.
The Bangladesh Bank has offered special concessions on the repayment of term loans on 18 December.
As per the central bank directive, term loans that were repayable in the September-December quarter this year cannot be classified if 50% of the installments are paid in due time. The remaining half of the installments will have to be paid within one year after the maturity of the loans. However, the garment factory owners said they need time till June next year for repaying the due amount.
As per the previous instructions of the Bangladesh Bank, the borrowers were required to pay 75% of their loan installments by December to avoid becoming defaulters.
