Supply chain at risk

Domestic supply chains are under threat, which could lead to a crisis or price spiral of essential food items during Ramadan.

Disruptions are gradually being felt everywhere – from ports to factories, storehouses and delivery channels – with the passing of every single day during the countrywide shutdown imposed to curb the spread of Covid-19. 

Disruption is also evident in the rural farm level where people are not getting fair prices of their produce.

Activities at Chattogram port that handles around 80 percent external trade of the country have come to a standstill as the amount of containers of imported goods has exceeded the port's storage capacity due to slow delivery of goods amid the nearly one-month-long shutdown.

The port has a storage capacity of 49,019 TEUs while on Saturday the volume of import containers reached 49,468 TEUs. Moreover, some 11 vessels were waiting at jetties to offload goods. Meanwhile, another 30 container vessels were waiting at outer anchorage for berthing.

The slogan of the port "Country moves with us" has literally become true, although in a negative way. The country is not moving and there is no public transport amid the shutdown, and so is the port, no matter how important it is to keep its operations on.

Leading consumer goods companies said goods are stuck at ports, at factories and in storehouses. So far, they are going with raw materials they have in stocks, but there will be problems in the days to come if the total supply chain system – from planning to sourcing, making and delivery – does not improve.

Businesses said they welcome the government's move to shut the country down for a month to stem the highly contagious disease. But, if the supply chain gets disrupted, there will be a crisis of goods, they warned.

Biswajit Saha, general manager of City Group, one of the two largest commodity conglomerates in the country, said they were facing disruption in three areas – Chattogram port, production in factories, and transportation.

"Ships loaded with goods are stuck at ports. We are not getting enough people to run production and drive trucks to carry the commodities," said Saha.

The demand for some commodities such as sugar, lentil, edible oil, flour and gram goes up by 20 to 30 percent during Ramadan which is just a few days away. So, trucks loaded with these goods should now be busy carrying them to all corners of the country.

But large business conglomerates such as Meghna Group of Industries, City Group, Abul Khair Group, Akij Group, Bashundhara Group are facing disruptions in their supply chain amid the shutdown.

They said none should forget that keeping the supply chain intact was no less important than the health safety issue of the citizens or financial packages for businesses. 

"Local people in many areas are preventing the entry and exit of trucks," said Mostafa Kamal, chairman and managing director of Meghna Group that has over three dozen factories in Narayanganj and Cumilla. 

"We have enough stocks of commodities, but we cannot transport those to the district and upazila levels," Kamal said.

Mahabubul Alam, president of Chattogram Chamber of Commerce and Industry, said to keep port activities and countrywide supply smooth, the government should take initiatives to bring goods carrier vehicles out on roads.

"If we cannot keep the port activities uninterrupted it will have a negative impact on our economy. Prices of goods will go up in Ramadan as well," said Alam, also the president of Port Users' Forum.

"If goods are not released from the port soon, there may be a huge shortage of those at the consumer-level," he said.

He also proposed to form a taskforce to make sure that the supply of essential commodities and import-export activities are uninterrupted. 

Contacted, Rear Admiral SM Abul Kalam Azad, chairman of the Chattogram Port Authority (CPA) told The Business Standard the port had already exceeded its storage capacity and that businesses should get their imported goods released.

"If the port activities come to a standstill, the country comes to a standstill. We have no other way to seek help from businessmen and other organisations concerned," said Azad.

However, the CPA is trying to transfer some containers to privately-run Inland Container Depots (ICDs) known as "Off-dock" as an alternative measure to tackle the situation. They will be able to transfer only 15,000 TEUs upon permission from the National Board of Revenue (NBR). 

Raw materials for the readymade garment sector constitute the bulk portion of import containers stuck at the port, followed by industrial raw materials, and foodstuffs and fruits used widely during Ramadan.    

"The situation is not conducive to taking delivery from the port because the entire garments industry is closed now. To take deliveries, we need transports," said AM Chowdhury Selim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

A senior economist has urged the government to take all-out measures to improve the supply chain situation for the sake of both businesses and consumers.

Dr Moinul Islam, a former professor of economics department at the Chittagong University, observes that already artificial crises of some goods have been created in the market. 

"The government should keep everything related to carrying goods to and from the port open to avoid any crises of essential commodities in the country," he said. 

If the government extends the shutdown, the crisis may worsen, said the economist adding that the government can consider lifting the shutdown in phases. 

Otherwise, economic crises caused by mismanagement might take more lives than what the epidemic can take, he warned.