August 6, 2020: Export volumes through the Bangladeshi port of Chittagong saw an almost 50 percent jump in July, but sources say it was likely a one-month blip linked to pent-up demand from pandemic-delayed orders.
Sources expect export figures for August and September to fall sharply, given the ongoing COVID-19 outbreak in the United States and bankruptcy declarations from some major apparel retailers.
Exports in July jumped to 72,359 TEU, from 49,000 TEU in June and 30,000 TEU in May. Chittagong typically handled 45,000 to 55,000 TEU in monthly exports prior to COVID-19-related disruptions.
Exporters pegged the July increase to the revival of suspended orders and taking delivery of goods that were already prepared before the Eid holiday. Apparel manufacturers say western buyers have canceled or suspended some $4 billion worth of work orders since March, but have since restored some of the orders.
Siddiqur Rahman, chairman of Bando Design Ltd., a garment maker for top retailers such as H&M, Zara, C&A, and Walmart, among others, said buyers in July took delivery of both delayed orders and regularly scheduled orders, leading to the sharp rise in exports.
“But August and September is a lean period for exports,” he said. “Besides, a week-long factory shutdown due to Eid also may cause exports to fall.”
The garment industry is Bangladesh’s top foreign currency earning sector. Taking into consideration the impact of the coronavirus pandemic, the government has reset its annual export target for the current fiscal year to $48 billion, compared with $54 billion last year.
“Major American companies are nowadays filing for bankruptcy being COVID-19 victims,” Rahman said. “Our export trend depends on the recovery of US and European markets.”
Source: JOC.COM
