A year and a half into the COVID-19 pandemic, Bangladesh’s woven apparel makers are optimistic about export recovery as they have booked work orders to almost their full capacities for the next five months.

Some exporters said buyers were still offering prices that were 10-15 percent below the pre-pandemic levels although a very small number of manufacturers are getting orders at the previous rates or even higher.

 

Exporters said last year’s prolonged shutdowns had caused huge damage to retail outlets in the U.S. and Europe. Scores of outlets were closed and many others survived through ecommerce by offering big discounts. As retail sales started peaking from late last year, retailers tried to get back in business without raising prices.

 

At the time, buyers’ agents took advantage of the situation by increasing their commission margins as manufacturers were facing work order shortages. A number of manufacturers ran their units at 30 percent of their capacities as they had no work orders. Some even had to shut down their units.

 

According to the Export Promotion Bureau data, apparel shipments in August recorded an 11.56 percent growth year-on-year, with exports reaching USD 2.75 billion. Of those, woven items saw a 4.47 percent growth after a 17.78 percent fall in July year-on-year. The decline in July was attributed to nearly two weeks of factory closure for Eid-ul-Adha and the COVID-19 lockdown.

 

Woven garments saw the first-ever lowest exports of USD 0.19 billion in April last year while the figure rose to USD 1.18 billion in the same month this year. Sparrow Group exported clothes worth about USD 165 million last year and Shovon hoped the figure would reach USD 200 million by the end of this calendar year.

 

The woven garment sector has been doing better gradually but the August growth did not reflect that as some backlogs were cleared that month. The improvement will be reflected by November, factory owners said.

 

Shahidullah Azim, vice-president at the Bangladesh Garment Manufacturers and Exporters Association, said the August growth was the result of shipments piled up during factory closures due to Eid-ul-Adha vacations and the lockdown in July. He hoped woven apparel exports would be better by November as factories had received huge work orders. Almost every factory is booked to 100 percent of its capacity till December and January, said Azim, also the chairman of Classic Group. His company has booked orders till January. He said prices were a bit lower than the pre-pandemic time but high volumes of work orders might make up for that. Denim Expert Limited Managing Director Mostafiz Uddin said his factory was booked to full capacity, but prices were not enough to recover business. He said woven garment exporters needed at least another season for recovery.

 

Managing Director of Ananta Apparel, a high-value apparel exporter, Sharif Zahir said they had booked orders to their full production capacity till January. He also hoped business would recover in the coming days. Former BGMEA president and Envoy Group Chairman Kutubuddin Ahmed said factory owners were waiting for this day for a long time. He said many manufacturers had been running their units below the breakeven costs. The entrepreneur also hoped buyers would consider manufacturers’ business situation while setting prices.

 

Source: tbsnews.net