30% of garment export orders deferred
For the past two to three months, foreign buyers have been putting their orders on hold and deferring them. As per our estimate, some 30% of orders have been deferred during this period.
Besides, the production in our factories has also decreased by at least 30% due to a reduction in export orders. Many factories are now operating at 50% capacity. Some factories have not received orders for November and December.
And the situation does not look likely to improve before January next.
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Again, those of our member factories that are running on diesel because of the low supply of gas have witnessed a spike in the cost of production.
Cotton and yarn prices are falling, but there is no scope for us to get any additional benefits out of this. This is because as soon as the price of cotton decreases, buyers reduce the prices of clothes at the same rate.
In this situation, it will be difficult for many garment factories to repay bank loans in the future. The burden of loan interest is getting bigger, and some have got their LC facilities limit blocked.
The garment sector is now in a difficult situation.
Md Shahidullah Azim is the vice president of BGMEA
