Mar-May RMG exports might fall by $5.0b

Apparel makers say export income from the country's readymade garment might decline by around US$5.0 billion between March and May due to the impact of pandemic.

They feel that the $38.20 billion-export earnings target from the RMG sector in the fiscal year of 2019-20 might not be achieved.

Bangladesh earned $21.84 billion during the first 10 months of current fiscal year, which was $23.12 billion in the corresponding period of last fiscal.

The country fetched $34.13 billion during FY 2018-19.

The Bangladesh Garment Manufacturers and Exporters Association, or BGMEA, made the projection based on the data from the state-run Export Promotion Bureau, or EPB and the National Board of Revenue, or NBR.

Citing EPB and NBR data, the BGMEA said apparel export in the month of March 2020 declined by 30.19 per cent while shipment witnessed 77.76 per cent decline during the first week of April.

BGMEA president Dr Rubana Huq said, "This can be estimated that export during March to May 2020 will fall short of around $4.9 billion from regular exports or confirmed orders."

The amount of resulting unsettled liability would be $1.96 billion, she added.

"We are calculating liabilities for the month of March, April and May 2020 since the impact of COVID-19 started in March, and we have opened back to back LCs in March for the shipments of May," she explained.

The value of liability on export figure incurred by back-to-back LCs is 40 per cent of the export value (FOB) on an average, the BGMEA chief estimated.

Factories would have to carry unsettled liabilities for the export, which has either been canceled or to be cancelled.

Some 1,134 garment factories have reported 975.20 million pieces worth $3.15 billion export cancelled/held up, affecting about 2.25 million workers until Sunday, according to BGMEA.

The Eid-ul-Fitr vacation will start after May 20 means they have 20 days in hand, Dr Huq said.

Since it takes at least three weeks to produce goods, there would be almost no goods ready for shipments by then, she said, adding "We can still assume the trend of April to follow in the month of May."

Bangladesh fetched $2.82 billion from RMG exports in March'19.

The BGMEA projected that $761.78 million would be earned in April' 20, which was $2.53 billion in April'19.

The May'20 earnings have been estimated at $972.95 million, which was $3.24 billion in the corresponding month of the last year.

The BGMEA estimated that the loss of export in three months (March to May'20) might be $4.9 billion.

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