Global buyers cancel work orders worth $133m

13 members of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have also work orders worth $40 million cancelled

Global brands and retailers, who purchase clothing goods from Bangladesh, have cancelled work orders worth $133 million over the uncertainty of business triggered by coronavirus pandemic.

According to Bangladesh Garment Manufacturers and Exporters and Association (BGMEA), a total of 69 apparel makers have faced order cancellation worth $93 million.

Meanwhile, 13 members of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have also work orders worth $40 million cancelled, which continues to rise every day.

Earlier, before the cancellation of work orders, a good number of brands and retailers suspended but now they have cancelled the orders.

“As conveyed by our member factories through special email and hotline, a total of 69 factories have witnessed work order cancellation to the tune of $93 million as of today (Wednesday),” Md Rezwan Selim, a BGMEA director, told Dhaka Tribune.

“The buyers earlier suspended the orders; now they are cancelling them. As of evening (Wednesday’s evening), a total of 13 factory owners informed us that their brands and buyers cancelled orders worth $40 million and it is increasing every hour,” BKMEA First Vice President Mohammad Hatem told Dhaka Tribune.

C&A alone cancelled work orders worth $15 million from Micro Fibre Group, he added.

Further deterioration in the situation may lead to job cuts in the sector as the factory owners would not be able to pay workers wages, sector people fear.

The $34 billion apparel sector is very crucial for Bangladesh economy, which contributes 84.20% to the total exports and employs about four million people, mostly women.

“If the factory owners do not have enough work orders or no work, they will not be able to pay the workers who will sit idle without work,” said Selim, adding that it could create unemployment as well as unrest in the sector.

In the evolving situation, the government must provide special fund free of interest at least for one year for workers’ wages, demanded Hatem.

Besides, Bangladesh Bank should ask banks not to declare exporters’ loans as classified in case of their failure to pay instalment in time, urged the business leader.

He also urged the government to keep the export-oriented industry out of the new electricity and gas tariff rate and not to disconnect connection in case of failure in bill payment for at least one year.

Though Bangladesh has seen less infection cases and only one death, the coronavirus has spread widely in its major export destinations such as the United States, Germany, the United Kingdom, Spain, Italy,  France and Canada.

On Wednesday, Bangladesh recorded its first death out of 14 infection cases in coronavirus, which has killed over 7,800 people from across the world in a global pandemic.

As a result, the demands of goods fall drastically as shops except essential goods remain closed in the virus-hit countries.  Brands like GAP, Nike, Inditex, and Sportswear have closed their stores.

Source: Dhaka Tribune

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