In recent days, many European Union (EU) nations have reported the highest number of Coronavirus cases because of the pandemic. As a result of protests by thousands of far-right supporters in Vienna against renewed restrictions on movement, Austria entered its fourth national lockdown on Monday, reports Reuters. Last week, the Netherlands also went on a partial lockdown to stop Covid-19 from spreading. Germany, Europe’s largest economy, is also expected to go into lockdown soon. Vaccinations alone will not reduce the number of cases, German Health Minister Jens Spahn said Friday.
The return of Coronavirus in Europe, which is the largest destination for clothes made in Bangladesh, will result in massive effects on the Bangladeshi RMG sector. Bangladesh’s government announced on November 16 that it would meet with export industry stakeholders soon to examine the market and possible repercussions. Bangladesh sends over 50% of its exportable goods to the EU markets. Furthermore, BGMEA President Faruque Hassan expressed concern about the current spread of the Coronavirus in major EU markets.
Besides, he noted that the readymade garment industry is starting to get orders and has been on track since it faced the pandemic last year. During the March-May period of 2020 alone, Bangladeshi RMG workers lost around $502 million in wages. This is mostly due to the absence of orders to keep factories alive.
The study titled “The Weakest Link in the Global Supply Chain: How the Pandemic is Affecting Bangladesh’s Garment Workers” found that 82% of workers interviewed reported a decline in income from February 2020 to April 2020. Seventy-seven percent of the workers reported difficulty feeding their entire household, while 69% were forced to consume less protein-rich foods. In comparison with 2019, export orders fell by 40-45% by June 2020. From that point on, the Bangladeshi apparel industry suffered a $724 million loss in exports to the United States.
Mental health and overall wellbeing were also at risk as workers worried about the pandemic and their financial futures, providing for their families, feeding them, and caring for their children. In the last four decades, the Bangladeshi RMG sector has generated some 4.4 million jobs, and the entire workforce was affected by Covid during the lockdown periods. In September of this year, the RMG industry finally began to pick up steam with the quality of life in European countries returning to normal. In terms of year-on-year growth, export earnings also reached an all-time high.
For the first four months of the current fiscal year (July-October), Bangladesh earned $15.74 billion from exports, representing a growth of 22.62%. October alone recorded a 60.37% year-on-year growth rate. In addition, the apparel sector experienced a historic growth of 53.28%, with exports reaching $3.56 billion. Experts, like Kazi Iftekquer Hossain, President of Bangladesh Garment Buying House Association, have suggested that product diversification might reduce some of Covid’s shortcomings in EU nations.
Generally, in a year, the textile sector of the country imports machinery worth $3 billion. Machine import bills declined to almost $750 million during the pandemic. As production costs have increased, the profit margin in the textile and garment industries has been gradually declining over the years.
Exporters and importers of RMG products are also seeing a large increase during the Christmas festival, just as they would during Eid or Puja festivals. All these recoveries are highly likely to fall back into a downward trend with Covid’s recent surge. According to Worldometer, there have been 205,954 fresh cases of Covid-19 detected around the world as of the filing of this report. Among the top six European countries in terms of Covid fresh cases, the Netherlands has 23,002 cases, followed by Austria, Poland, and Germany with 13,806, 12,334, and 11,477 cases, respectively.
SOURCE:
Image Courtesy:
- https://www.fibre2fashion.com/news/apparel-news/covid-re-advent-in-europe-production-cost-rise-hit-bangla-rmg-sector-277612-newsdetails.htm
- https://www.myanmarinsider.com/impact-of-covid-19-on-garment-and-textile-industry/
- https://thefinancialexpress.com.bd/special-issues/rmg-textile/sustaining-rmg-industry-growth-1504106567
Written By Rafiad Ruhi
