Bangladesh's export earnings from the coronavirus-hit apparel sector are likely to fall by around $10 billion in 2020 from $33 billion in the previous calendar year.
As a result, the country is surely going to face a massive shortfall in meeting its target of exporting $38.2 billion worth of apparel products in the current 2019-20 fiscal year.
Bangladesh earned $34.13 billion by exporting clothing items in the 2018-19 fiscal.
Economists and apparel manufacturers came up with the observation while speaking with The Business Standard yesterday.
The global apparel consumption had been decreasing for the last few years, they pointed out, adding that the Covid-19 pandemic has added to this declining trend.
Overall, the country is likely to earn $6-7 billion less from apparel exports in the ongoing fiscal as compared to the previous year. This will deal a heavy blow to the country's overall export earnings which was $40.53 billion in the 2018-19 fiscal.
"We fear our export figure will not be more than $23-24 billion in 2020. The pandemic has worsened the already declining trend in global apparel consumption, and we also do not know what the post-pandemic situation will be," said Rubana Huq, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Dr Ahsan H Mansur, executive director of the think tank Policy Research Institute of Bangladesh (PRI), endorsed the BGMEA president's apprehension, saying that export earnings from the sector may shrink by 30 percent year-on-year in FY2020 as exports witnessed a drastic fall in March and April.
The trend may continue to the next fiscal year, he said, adding that the situation might improve slightly after September but will take a long time to recover fully.
Apparel manufacturers also have no idea as to what will happen in the next three to four months as the time for placing orders for those months are already over but most factories have received orders less than 50 percent of their production capacity.
According to BGMEA data of May 1 to May 19 this year, the country's apparel export has dipped by 55.7 percent as compared to the corresponding period's the previous year. In April, the export saw an 85-percent negative growth.
PRI Executive Director Ahsan H Mansur expressed his concern over the future business as most apparel exporting countries are recovering from the Covid-19 situation but Bangladesh is still under an adverse situation.
"Many of buyers would not visit Bangladesh in this situation and may not allow Bangladeshis to visit their countries if it fails to control the situation," he added.
"We have wasted two months in the name of lockdown. If we strongly maintained lockdown guidelines, it might have borne good results for us," argued Dr Ahsan.
Apparel exporters also observed that Covid-19 has changed the face of global business and has taken it to a point of uncertainty. But while Bangladeshi apparel exporters face challenges, they look forward to new opportunities to fight the battle, win it and sustain.
"We do not know who the post-pandemic customers will be. Maybe, they will want to buy best products which will be sustainable as well," said Rubana.
The BGMEA president said they needed to create own apparel brands for branding Bangladesh, which will help to get a better profit margin and help to share a part of the profit to their workers.
They have plans to go beyond the basic items to diversify their business. However, Bangladeshi apparel makers exported only 5 basic items, which is about 73 percent of total apparel export earnings.
"Apparel makers should have diversified their products from cotton-based to manmade fibre-based items to make their business sustainable," said Dr Ahsan.
Meanwhile, Rubana said the concept of sustainability has changed. Now it involves workers alongside environmental sustainability, she continued, if they do not survive the businesses will not also survive.
In the July 2019 to April 2020 period, export growth was -14 percent – the lowest in the last 5 years, according to BGMEA data.
All export markets also experienced a fall between 8 and 22 percent in this period.
BGMEA statistics shows that the US' import from Vietnam increased by up to 7 percent, that from China fell by 52 percent and from Bangladesh by 2 percent.
In terms of unit value, Bangladesh exports fell by .90 percent to the US and by 1.87 percent to EU markets.
The BGMEA president thought Bangladesh has an opportunity to increase its exports in this circumstance.
Cancellation and holding up of orders accounted for $499 million from US and $1.55 billion from EU, she added.
Meanwhile, Global Data recently made a forecast that Covid-19 will wipe off $297 billion from the global apparel market in 2020 – a 15.2-percent decline as compared to that in 2019.