Europe’s Covid second wave not to hurt RMG export soon

Bangladesh's readymade garment business in the European Union, the largest export destination, is likely to remain unhurt at least till December this year even if the Covid-19 second wave has already taken a serious turn there, say experts.

The pouring in of work orders for the next spring and summer, and enquiries for next winter are evidence that Bangladesh now knows how to deal with the pandemic, they say.

The apparel makers have already made shipments of Christmas and winter orders to major buyers. The buyers are expected to begin their sales from mid-November, according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Now both the government and entrepreneurs need to adopt strategies, given the new normal, to continue positive growth in the apparel export, which, of late, has made a turnaround from pandemic shocks, Dr Sayema Haque Bidisha, research director at South Asian Network on Economic Modelling (Sanem), told The Business Standard.

Apparel businesses need to enhance their efficiency in manufacturing goods and shipping those quickly with lead time now having been curtailed to 30-45 days from 60-90 days for a good number of items, she added.

The government also has to ensure a quick release of imported raw materials, meant for the readymade garment industries, from ports, Dr Sayema Haque pointed out.

"We have to open discussions with apparel buyers and retailers so that they do not cancel work orders or stop new placements all of a sudden. We need an assurance from them that they will continue it till next January at least," she added.

New measures to deal with second wave in Europe

Analysing Covid-19 cases, the number of infected persons was 7,267 in Germany, one of top seven EU apparel destinations for Bangladesh, on 17 October, the peak day in the second wave, on the basis of the last three days' moving average.

The infection rate has been coming down day by day in Germany.

The number of cases stood at 18,645 in the United Kingdom, while the figure was 5288 during the first wave peak day on 10 April on the basis of the preceding three days' moving average.

In the Netherlands, the number of infections was 8,174 on 19 October, the peak day, while the figure was 1,288 on 12 April, the first wave peak day.

Poland is still going through its first wave.

With new Covid-19 cases continuing to surge, new measures to deal with the second wave are now in place across Europe. Many countries have reintroduced restrictions which had been eased after the initial lockdowns.

A night-time curfew has come into effect in France, while Spain, the Netherlands and the Republic of Ireland have gone for local lockdowns partially, which will last from two to six weeks.

Besides, Germany, Italy, Denmark, Belgium, Portugal and Greece have imposed new measures to rein in the second wave of Covid-19.

However, Sweden has not imposed any lockdown measures yet but most people are complying with government advice to voluntarily maintain social distancing and have also started working from home where possible.

This time lockdown patterns have changed from what it was during the first wave of coronavirus. The countries are imposing partial lockdowns as they cannot afford to enforce a complete shutdown of their economic activities anymore, said Ashikur Rahman Tuhin, a former director of BGMEA.

The shutdown of economic activities to stem Covid-19 transmission hardly brought about any positive outcomes in the initial lockdowns worldwide. Therefore, it is necessary to continue economic activities by complying with health safety protocols suggested by the World Health Organisation, said Dr Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD).

New orders continue to roll in

European buyers continue to place new work orders amid the Covid-19 second wave because their online sales have increased significantly and they have kept their physical shops open as well, said a top official of a leading European brand, seeking anonymity.

Customers' buying habits have changed because of the pandemic. Now, a large number of customers are buying products from online stores instead of going to shops in person, the brand representative added.

EU buyers continue to place new orders to Bangladeshi suppliers, considering profitability. Buyers get more profits from the apparel items they buy from them. The average production cost is comparatively low in Bangladesh, the official said.  

The new restrictions imposed in the European countries are to stop public gatherings and ensure social distancing. Bars and restaurants have to close in particular, the official said, adding that no business has been affected in those countries because of the second wave.

Fazlee Shamim Ehsan, chief executive officer at Fatullah Apparels Ltd, said apparel exporters are receiving new orders for the next summer and inquiries for winter, but the quantity is lower compared to the same period last year.

This may be due to the seasonal issue. The order situation usually remains dull during this time of the year, said Fazlee Shamim.

Md Mohiuddin Rubel, director of Denim Expert Limited and BGMEA, said, "We are also closely observing the pandemic situation in the EU. If the pandemic hits their businesses,we will also get affected."