Bangladesh's key garments sector hits a wall with shortage of raw material

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Bangladesh’s apparel sector, the country’s top forex earner, has been hit by coronavirus-related supply chain disorder, with charges for raw materials soaring.

As materials from China neglect to get to time, prices of local stocks of items have risen by nearly 50% occasionally.

Some factory owners have already been forced to bring recycleables in by air to meet manufacturing deadlines.

And the sector is gearing up for a prolonged crisis as the virus continues to spread worldwide, with fears that destination markets in the US and Europe will be affected.

Bangladesh imports some 60% of its woven fabrics from China, according to an assessment report of the Bangladesh Trade and Tariff Commission (BTTC).

The report says some 15-20% of recycleables and 80-85% of dyeing chemicals and accessories of the knitwear sector comes from China. And some 40% of raw materials for garment accessories and the packaging manufacturing industry also originates from China every year.

“In general, we are possibly likely to take a hit for three to four months,” the president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Dr Rubana Huq, said.

She added that the price of all accessories, including yarn and sewing thread, are going up “almost 50%. That is totally killing us”, she told The Loadstar.

“If regular shipments from China usually do not resume next two weeks, we will not have the ability to procure any trim, as a lot of the raw material is from China,” Dr Huq said.

The senior vice president of the Bangladesh Knitwear Manufacturers and Exporters Association, Mohammed Hatem, told The Loadstar the sector was facing a significant challenge.

“I am forced to airship fabrics and recycleables to meet up deadlines,” he said.

Mr Hatem, whose factory supplies apparel brands worldwide, said production in lots of factories was hampered by having less raw materials.

“Because of the short supply, prices of different recycleables have increased by between 30% and 40%” he said.

Former BGMEA president Siddiqur Rahman said that as offices and factories in China were gradually reopening, recycleables would start arriving.

“But the spread of coronavirus in Europe and America is a new concern for all of us. Our garment export is principally dependent on these two markets,” he said. “Our sustainability will face a significant threat if the virus spreads severely in Europe and America,” he added.

In fiscal year 2018-19, Bangladesh exported apparel worth $34.13bn, registering 11.49% growth, year on year. However, the sector is facing a negative trend this year, raising concerns that gross annual targets may not be achieved.
Source: https://theloadstar.com

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