Covid-19 second wave to shock garment exports: BGMEA

The second wave of coronavirus pandemic has begun to have an adverse effect on the country's export-oriented garment industry with a drastic fall in the export bulk. Experts, however, said the first wave of pandemic is still sweeping through the country and yet to be complete.

In November, the Bangladesh garment exports fell six percent and prices fell by about five percent. The Bangladesh Garment Manufacturers and Exporters’ Association (BGMEA), an association of garment industry owners, submitted a report to the finance ministry last week highlighting such information. In the report, the organisation has proposed to increase the repayment period of the incentive loan given by the government from 18 months to 60 months.

Meanwhile, the finance ministry is not taking any decision to extend the repayment period of Tk 5,000 crore incentive loan for the salaries and allowances of the workers and employees of the export sector affected by the coronavirus. The finance minister will soon seek guidance from the prime minister in this regard. This information has been known from relevant sources.

In April-June, 35 lakh garment workers were paid from the government's Tk 5,000 crore incentive loan package for the export sector in coronavirus pandemic period. The Ministry of Finance provides this assistance from the current budget. However, the condition was to repay the loan in 18 months and its grace period will be six months. In the context of the second wave of coronavirus, BGMEA has proposed to increase the loan repayment period from 18 months to 5 years and the grace period from 6 months to 12 months.

In this regard, a senior official of the Finance Division said that the prime minister's direction will be sought on the BGMEA proposal. The Finance Division will decide as her directs. The finance minister will discuss the matter with the prime minister. However, at present, the Finance Minister AHM Mostafa Kamal is under follow-up treatment.

The report further said that the impact of the second wave has led to a sharp fall in retail prices and demand for more garments in the global market in October and November.

Its negative impact has inflicted both the growth and value of exports of the country's garment industry.

Earlier, due to the global lockdown caused by the coronavirus pandemic, the price and demand for clothing have been declining since February. This downtrend is still on especially in August as the price of ready-made garments in the European market fell by 5 percent. The prices dropped further to 13 percent in September.

Similarly, the price of clothing has also decreased in the US market. Clothing sales fell by nine percent in the United States in September. Due to the second wave, it dropped further to 13 percent in October.

Highlighting the fall in the prices of clothing, the report said that the prices of clothing are falling even before the coronavirus pandemic situation set in.

In the five years of 2014-19, the value of the country's garment exports has lost 1.89 percent on an average per year. Coronavirus fallout lost 5.23 percent of global clothing prices in September with 4.61 percent in the United States.

Overall, the global apparel prices fell by 4.15 percent in October, continuing the downward trend. And in the first 20 days of November, the price has fallen by 4.92 percent.

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