New Shankai Dress Khat – Bhorer Kagoj

Orders are falling in the US and European markets
Many factories are closing down

A new cloud of apprehension has appeared in the garment sector of the country. However, the entrepreneurs of the sector have been under pressure for several months due to declining export earnings. They say that the major export regions have experienced high inflation for a long time, and in the future, exports to those regions have decreased significantly. Already its influence has started to be evident. Compared to last year, purchase orders have decreased by at least 30 to 35 percent this year. Many small factories are closing due to lack of orders and financial crisis. Workers are becoming unemployed. Imports of capital equipment and raw materials also decreased due to decrease in orders. The data of the central bank also proves it. In such a situation, the entrepreneurs of this sector think that the warning of the United States about the visa based on the national elections has cast a new shadow of fear.

The garment sector of the country is already suffering from the effects of Corona, Russia-Ukraine war and internal instability. However, despite the crisis, the owners of this industry were trying to turn around. But this sector, which plays a major role in the country’s economy, is unable to overcome the crisis. Purchase orders are decreasing. According to the data of BGMEA, the largest organization of the apparel sector, the purchase orders have decreased by at least 30 to 35 percent this year compared to last year. Many small factories are closing due to lack of orders and financial crisis. Small entrepreneurs are sitting in the way, workers are becoming unemployed. Garment exporters’ organization BGMEA claims that new orders are decreasing due to the impact of Ukraine war.

It is said that the garment industry was turning around to face the Corona situation. But due to the Russia-Ukraine war, the sector is in a new crisis. In the meantime, there was a warning about the US visa. The country said in an announcement that it will not grant visas to those who obstruct the fair and free elections in Bangladesh and those who obstruct the progress of the democratic process. Various discussions are going on whether the new US policy given last Wednesday will affect the import-export trade.

According to the data of Bangladesh Bank and Export Development Bureau (EPB) – in the first 10 months of the current financial year, the export of the country’s manufactured garment products has increased in the UK, Canada and European markets. However, it has decreased in the US market. According to EPB’s data for July-April of fiscal year 2022-23, the first 10 months of readymade garment export earnings stood at 38.57 billion dollars with a growth of 9.09 percent compared to the same period of last fiscal year. In the last 10 months, the export of garments made in the United Kingdom market has increased by 10.88 percent, the Canadian market has increased by 16.09 percent and the European market has increased by 8.58 percent. On the other hand, 7.13 percent of the products have decreased in the US market.

Those related to the sector said that there is a surplus in our trade as exports are high and imports are low with the United States. Which helps to increase foreign exchange reserves. Apart from that, the largest expatriate income is now coming from the US. Bangladesh exported goods worth 142 million dollars to the US market in the fiscal year 2021-22. On the contrary, it imported only 283 million dollars worth of goods. Saudi Arabia and the United Arab Emirates (UAE) have always topped the list of expatriate incomes. However, in the last two financial years, the United States overtook the United Arab Emirates and occupied the second place. In the first 10 months (July-April) of the current financial year, the maximum expatriate income of 304 million 73 million dollars came from the United States. The second highest 303.9 million dollars came from Saudi Arabia.

When asked, Shahidullah Azim, MD of Classic Fashion Concept, an entrepreneur in the clothing sector, and vice president of BGMEA, told the paper that the global instability caused by the Ukraine-Russia war, as well as domestic price inflation, has caused a crisis in electricity supply. Due to all this, purchase orders have decreased. The apparel sector is in critical condition. Purchase orders have decreased by about 30-35 percent compared to last year. In this situation, the clothing sector is facing a crisis. Many factories are closing down. There is no labor unrest. He said, we are trying to capture new markets as orders from Europe-America are less. Looking for alternative markets in various countries including Korea, Japan, India. It also takes time. But the apparel sector is in a state of uncertainty. Meanwhile, we are also worried about the new visa announcement. He said, we export more to America and import less. He said, we export about 80 percent of products there. In that case, we have to go to that country regularly to participate in various international fairs or summits or for export work. So if they go to such a decision about the visa; Then we will be in trouble. However, he said that no complications have arisen yet. But there’s no reason it won’t in the near future.

The business leader also said that the decision made by the United States is a political matter, not all businessmen are involved in this politics. So we hope it won’t be too negative for business. However, some problems may arise in the long run. For example, it takes a year for many people to get an American visa now. Such complications will increase in the future. If they delay the verification and issuance of visas – then many buyers will not be able to meet at the scheduled time. will become a problem.

Although there will be no impact on the trade, Mohammad Hatem, executive president of BKMEA, an association of knitwear industry owners, believes. He said, the products we export to the US market are the best products globally. At the price we give them this world-class clothing, no other country can provide them with this necessary product. So take it from us. It does not give us any special benefits. Therefore, the new policy that has been adopted will not have any impact on trade or import-export.

Businessmen claim that around 370 factories have been closed this year. 25 to 30 thousand workers have lost their jobs. Several more factories are on the way to closure. According to Bangladesh Industrial Police, a total of 97 factories in the country were closed in the first three months from January to March this year. Due to their closure, 20 thousand 276 workers have lost their jobs and become unemployed. Among the closed factories, 6,647 workers lost their jobs in 17 BGMEA member factories.

1 thousand 486 workers in seven factories belonging to BKMEA, 2 thousand 87 workers in three factories belonging to BTMEA, 2 thousand 45 workers in two factories of Bepja have become unemployed. 510 factories across the country were closed last year due to the impact of the Ukraine-Russia war. Among them, 96 factories were closed in Ashulia area, 157 in Gazipur, 80 in Chittagong, 20 in Narayanganj, six in Mymensingh and 151 in Khulna. Apart from not getting purchase orders, many factories are closing due to worker dissatisfaction. A number of factories including Savar, Ashulia, Gazipur, Narayanganj and Chittagong were closed before and after Eid. The workers also protested because they did not get paid in these factories.

BGMEA president Farooq Hasan said in a press conference recently that the garment sector is in a fragile state due to various pressures, there is no alternative to the continued support of the government to maintain the positive growth of the garment industry. He said, our garment industry is under pressure due to various reasons. Inflation has increased, but the price of goods has not increased. The government gave various incentives during Corona. Incentives for exports need to be increased.


Source: Bhorer Kagoj by

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