Apparel exporters fear slowdown in orders from Europe amid new Covid curbs

As a new Covid variant is set to test Europe's economic resilience to lockdown, Bangladeshi apparel exporters wish Europe success as they fear a decline in export if the situation worsens.

A number of countries in Europe have already imposed new restrictions to contain the spread of the new coronavirus variant Omicron, which the World Health Organisation (WHO) declared a "variant of concern." 

The garment manufacturers are closely monitoring the developments in European countries, their major export destination. Amid fear of a temporary slowdown in export orders, some of them, however, hoped that global brands this time might not suspend orders and allow store shelves to be empty during the festival sales. 

ShahidullahAzim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said, "Germany, one of the major buying countries, has been facing 50,000-60,000 infections daily, while the Netherlands has already imposed lockdown."

He said after the second wave of Covid 19, the apparel exports from Bangladesh have just started to rebound in the last three months, thanks to the reopening of stores in European countries. In this situation, the new Covid variant has emerged as a cause of fresh concern for the key export sector.   

"We are mainly concerned about the possibility that the buyers may put their orders on hold," he added. 

During the first wave of Covid-19, the global fashion brands and buyers cancelled and suspended apparel orders worth more than $3.15 billion, affecting 1,136 factories, according to the BGMEA.

BGMEA Vice-President ShahidullahAzim said, "During the last few months, brands and buyers have been putting pressure on us to ship goods quickly, but now they are asking us to slow down our production."  

Bangladesh has recorded the highest ever single-month export earnings amounting to $4.72 billion in October, thanks to a strong rebound in demand for apparels in the western countries ahead of the festival season and the supply disruptions of key competitors that faced fresh waves of pandemic.

The export receipts surpassed the $3.46 billion target set for the month, registering a whopping 60.37% year-on-year growth, according to provisional data of the Export Promotion Bureau.

Apparel shipment from Bangladesh grew by 53.27% to $3.56 billion year-on-year in October, raising the total export earnings to $15.74 billion in the first four months of this fiscal year.

Bangladesh Apparel Exchange founder and CEO Mostafiz Uddin said, "We have to wait till 15 December to observe how the market situation turns." 

"If the brands cannot sell products or their business is affected, it will have an impact on our business," he added. 

SM Khaled, managing director of one of the leading apparel exporters Snowtex Group, said, "We are talking with the buyers regarding the Covid situation in the European Union. They informed us as they are struggling to maintain inventory."

"The buyers assured us that they will continue sourcing as they have a shortage of products compared to their capacity of stores," he said.

Khaled also said if 8-10 European Union countries impose new restrictions that will definitely have an impact on the apparel export from Bangladesh. 

He further said restrictions in a single country would not affect the garment business much as a single brand has operations in many countries. 

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) vice president FazleeShamimEhsan said, "The buyers have learnt a lesson from the past waves of the pandemic. They know that if they cancel and suspend any order, that will tarnish their brand image." 

He also expressed hope that the EU countries may focus on life and livelihood during these new restrictions.