RMG makers stare at order cancellations

Many global brands have asked their Bangladeshi apparel makers to cut production and hold shipments off amid a slide in consumption worldwide due to the outbreak of coronavirus.

Some buyers have also requested their Bangladeshi exporters to reduce their existing order quantity.

"This will have serious consequences as we see an imminent liquidity crisis that will cause financial disruption for the manufacturing units," said Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

In a state of obvious dismay, she said the brands were cutting down their orders and asking manufacturers not to make fabrics until further orders.

"And those who are producing fabrics have been asked to hold their shipments off as global consumption is coming to a halt."

Apparel manufacturers and exporters have expressed their deep concern about the cancellations of orders, which they said were on a rise and could get acute in the coming days.

"And right before Eid, when the apparel exporters will have to pay bonus as well, falling exports and shipments are the worst possible challenges that the industry can face," Rubana Huq said.

Shahidul Haque Mukul, managing director of Adams Apparels, got an order cancellation on Thursday evening.

Rezwan Selim who produces sweaters at his Softex Sweater Industries Private Limited for export to Germany and France, has seen his buyers shifting orders to Turkey.

Inamul Haq Khan, managing director of Ananta Garments, said one of his USA buyers had readjusted his orders. His export shipment to China has also remained halted for over a month.

The deadly outbreak of coronavirus in Europe has forced consumers to stay home. Shops remain empty despite offering hefty discounts in sales to customers, according to some suppliers in Bangladesh.

Bangladesh's apparel exports, which have witnessed a 5.71 percent negative growth in the first eight months till February of the current fiscal year, are poised to decline further.

Of the $34 billion worth of garments Bangladesh exported in 2018-19, over 60 percent were shipped to European nations. The next biggest buyer – the USA – is also facing the menace of the virus, which has prompted the government to declare emergency in some states.