Exporters are a bundle of nerves now
Bangladesh's export earnings await a massive blow in the coming months as the global coronavirus pandemic has wreaked havoc on orders and shipment while sending factories to a near standstill, exporters and experts said.
Earnings already took a hit in March, plunging 18.29 per cent year-on-year to $2.73 billion, because of a drop in shipments of major commodities like garment, leather and leather goods and frozen foods, according to the Export Promotion Bureau.
"The impact of the pandemic was not reflected on the export figures of March as those were based on the shipments made earlier," said Ahsan H Mansur, executive director of Policy Research Institute.
The coronavirus outbreak started affecting production from the beginning of April when most of the industrial units in Bangladesh were shut down.
Mansur's observation was aligned with the outcome between April 1 and April 15, when apparel exports nosedived 83.74 per cent to $194 million from a year earlier, according to data from Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
Shipment of garment, which accounts for about 84 per cent of Bangladesh's total exports, declined 26.70 per cent year-on-year to $1.97 billion in March.
The pandemic started affecting apparel export as most retailers kept their shutters down in the US and Europe, and cancelled work orders worth more than $3.11 billion so far. The worst-affected countries such as Italy, the UK, the US, France, Spain and Germany are the prime destinations of Bangladeshi garment items.
The US imports apparel items worth $6 billion a year from Bangladesh, while Germany also sources almost the same amount. The country exports about $3 billion worth of garment items to Italy and the UK each, and $2.5 billion to Spain and France each.
Under the present circumstances, Mansur said Bangladesh should keep exporting its products, if necessary, on a limited scale, as there is a demand for Bangladeshi products in the international markets.
Bangladesh can resume production at its factories after April 25 by taking appropriate safety measures as many countries like Spain and China have opened their factories and markets, he added.
Saiful Islam, president of the Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh, said international buyers have cancelled work orders worth $316 million so far.
Shipment of leather and leather goods, the second biggest export industry after garments, fell 10.78 per cent to $688.51 million in the July-March period of the fiscal year, while the sector fetched a total of $1.02 billion in fiscal 2018-19.
"We will face further challenges in the international markets as our rivals like China, Vietnam and Cambodia are opening their factories gradually," Islam told The Daily Star over the phone.
Since the factories in Bangladesh are closed now, buyers are not even placing any queries, he said, adding: "So, the future is bleak for the sector."
The total export receipts in March were 28.61 per cent short of the monthly target at $3.82 billion. The overall exports earnings fell 6.24 per cent year-on-year to $28.97 billion during the July-March period of the fiscal year. The amount is 14.52 per cent below the periodic target of $33.89 billion.
During the period, the shipment of frozen foods declined 3.91 per cent to $402.6 million, agricultural products 0.1 per cent to $721.98 million, terry towel 29.12 per cent to $30.04 million and home textile 7.59 per cent to $598.19 million.
However, the shipment of jute and jute goods rose 23.49 per cent to $775.63 million, pharmaceuticals 6.50 per cent to $106.22 million and footwear 25.17 per cent to $242.07 million.