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Undelivered ready garments are piling up in the country’s readymade garment factories as a good number of buyers from European countries have asked their suppliers to delay the shipment of their products two to four weeks due to the global coronavirus outbreak.
Bangladesh’s exporters said that they were facing troubles with the undelivered products as the number of requests from buyers to hold shipment was increasing.
They said that they might incur a huge amount of losses for putting the shipment on hold and might face a shortage of working capital in the sector as the payment from buyers would be deferred until receiving the products.
One of the exporters said that Zara, a Spanish apparel retailer, had put all its shipment on hold while Decathlon, a French retailer, had deferred its shipment partially.
‘Buyers have asked us not to ship ready garments and hold the delivery of uncut fabrics until further instructions. Now we are facing many types of difficulties including shortage of space in our stores and scarcity of running capital due to the shipment delay,’ Md Mostafiz Uddin, managing director of Denim Expert Limited.
He said that the shipment delay was not acceptable as manufacturers produced the products taking bank loans against back-to-back letters of credit and now the bank loans taken by the factory owners might be classified due to non-payment.
Mostafiz said that some of the European buyers had deferred for 30 days the scheduled payment for apparel products they ordered for using the coronavirus outbreak as a pretext.
‘It is true the epidemic has put us in a situation when strengthening relationship between the buyers and the suppliers as well as responsible purchasing practice are needed more than any time before but applying pressure only on suppliers is not acceptable,’ he said.
Putting the shipment of ready garments on hold by the buyers has created problems for manufacturers in importing raw materials and producing products for current orders due to a shortage of cash money and space in warehouses, Mostafiz said.
Mohammad Hatem, first vice-president of the Bangladesh Knitwear Manufacturers and Exporters Association, said that many exporters were facing cancelation of orders and delayed shipment to Europe.
Buyers from Europe wanted to know the status of orders they placed in Bangladesh and asked many suppliers to hold shipment of the products for few weeks as stores in the buyers’ countries became devoid of shoppers due to the coronavirus outbreak, he said.
‘Many of our member factories fear huge losses as some of the big buyers of Europe cancelled a large quantity of orders and some buyers downsized their requirements,’ Hatem said.
One of the exporting company said that the shipment of more than 50 per cent of the orders the factory received had been put on hold.
Buyers mostly from Italy, Spain and Ireland asked them to hold the shipment of ready products for two to four weeks, the factory authorities said.
Commerce minister Tipu Munshi on Sunday said that some buyers from Europe wanted to cancel orders they placed before and some wanted to defer the shipment of the products due to the coronavirus outbreak in the zone.
‘Our exporters are facing some troubles in export markets as the consumers who buy our products are panicked due to the epidemic,’ the minister said.
The coronavirus pandemic broke out in China in December last year and has now spread to over 115 countries.
Three people were tested positive for coronavirus for the first time in Bangladesh on March 8 and two more cases were detected on Saturday.
(NA)
