Bangladesh’s potential export loss $17m if coronavirus disrupts Chinese supply chain: UNCTAD

A two percent reduction in the Chinese supply of intermediate inputs due to coronavirus epidemic might lead to a loss of $17 million in Bangladesh's exports, says a technical note of the United Nations Conference on Trade and Development (UNCTAD).

Of the total amount, leather product export loss will be $15 million, and textile and apparel $1 million. 

The export of wood products and furniture will face the remaining $1 million loss.

China supplies 30 percent of intermediate products for Bangladesh's knit industry, and 65 percent for woven industry.   

Vietnam, a big competitor of Bangladesh's clothing industry, will suffer a loss of $2,296 million, $207 million in textiles and apparel exports.   

Economies that will face the biggest losses are the European Union ($15,597 million) and the US ($5,779 million). 

The loss will be incurred because China is the main supplier of intermediate inputs for many manufacturing companies abroad, and supply disruptions there can affect the exports of a country depending on how reliant its industries are on Chinese suppliers.    

For many companies, the limited use of inventories brought by a lean and just-in-time manufacturing process would result in shortages that will impact their production capabilities and overall exports.  

Bangladesh is among the countries most exposed to Chinese supply disruptions due to coronavirus epidemic, according to the UNCTAD note released on Wednesday.

The note was published with a disclaimer, saying the document had not been formally edited.