Covid second wave scare cripples import orders
Bangladesh’s import orders fell nearly 14% in October as apparel exports amid second coronavirus wave in US and Europe Businessmen have reduced their purchases of textiles.
The latest data from the central bank showed that the amount of letters of credit issued fell to US$3.83 billion in October from US$4.43 billion a month ago.
Similarly, settlement of letters of credit, often referred to as physical imports, fell by more than 10% in value terms to $3.34 billion in October from $3.71 billion in October.
The country’s overall imports have fallen again as a second wave of coronavirus infections grips the US and European countries, a senior Bangladesh Bank (BB) official said while talking to FE. Reduced demand for readymade garments (RMG) products in Bangladesh.
Moreover, the central banker attributed the recession to an unexpected slowdown in the global economy from the pandemic.
BB data shows that in October, the opening volume of import letters of credit for back-to-back imports of textiles dropped from US$546.70 million in September 2020 to US$431.34 million, a drop of more than 21%.
After analyzing the data for the past eight months, it was found that the downward trend in imports started in April this year after the coronavirus outbreak in Bangladesh.
Imports increased in June after the resumption of overall business activities across the country, but the downward trend in purchases from abroad started again from July 2020. The downward trend in imports continued into August.
RMG entrepreneurs are keeping a close eye on the bigger picture as they worry about a new wave of Covid-19 pandemic in Western countries, Bangladesh’s main export destination.
Fazlul Hoque, former president of Bangladesh Knitted Garments Manufacturers and Exporters Association (BKMEA), said: “Due to the second wave of Covid-19 pandemic, new orders for RMG products have declined slightly since October. Decline.”
Mr Hoque, who is also the managing director of Plummy Fashions, is concerned that back-to-back imports of RMG products may fall further in November.
Echoing Mr Hoque, Square Denims general manager Sayeed Ahmad Chowdhury said new orders from global buyers fell by about 7.0% during the period, mainly due to the second wave of coronavirus infections around the world. .
Chowdhury pointed out: “Supply chain disruption in the apparel and apparel industry continues due to the ongoing Covid-19 pandemic.”
On the other hand, raw cotton’s sales in October Import orders rose nearly 20% to $237.1 million from $194.2 million a month ago, while openings of letters of credit for capital machinery rose to $442.8 million from $409.8 million. </p
