Is Bangladesh unrest forcing garment buyers to flee?
Manufacturers fear violence, protests, strikes and unrest in Bangladesh are deterring buyers.
Bangladesh's garment makers could face a drought of summer 2014 orders as western retailers have begun fleeing the South Asian nation after recent political violence and a physical attack on Spanish buyers.
Top industry leaders said that global buyers, seeking stable alternatives, have already diverted 30%-35% of orders to Bangladesh's rivals, with India, Indonesia and Vietnam emerging as winners.
For instance, India's garment shipmenta posted 21% growth in November while Bangladesh's textile producers struggle to lure back runaway retailers.
"They [buyers] want everything cheap and quick. How can we do that? Between 1 November and 12 December we couldn't work for 23 days due to hartals (shutdowns) and blockades," Md Shahidullah Azim, a vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told just-style.
"It's not summer orders alone, fall [autumn 2014] orders will also be hit hard."
Since November, the industry group reckons, political violence ahead of Bangladesh's January general elections is causing textile producers to bleed around US$65m a day in lost earnings.
Azim warned that 600 to 700 factories might be closed by February, which could render tens of thousands of workers jobless.
Furthermore, Mohammad Hatem, a vice president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said buyers have issued a "red alert" about visiting Bangladesh since an attack on representatives of a Spanish retailer last month in the Bangladeshi capital of Dhaka.
He added that the representatives of JHK Trader had been due to place orders with Wisdom Attires Ltd, but instead left Dhaka without striking a deal.
"Hardly any buyers visited the country in the last two months...They say, 'we can't follow up after placing orders'," he told just-style.
A senior official at Bangladesh manufacturer the Nassa Group, which has an annual turnover of US$200m, said his company's negotiators are meeting Wal-Mart representatives in China and Kmart's in Hong Kong, to avoid Bangladesh visits.
"Buyers are unusually hesitant. Our volume has declined sharply in the last two months," said the Nassa official.
KI Hossain, president of the Bangladesh Garment Buying House Association, estimates that buyers' visits dropped by 10% in the past three months, compared with the same period last year.
"Buyers have skipped November-December visits. Although some buyers came, they hastily left the country without closing any deals," said Hossain, who heads a body of 300-plus buying houses, mostly local.
He said the UK's Boi Trading and Bonmarche and Canada's Bluenotes are among the clothing retailers that cancelled their planned November trips.
And while November textile export data has yet to be released, industry leaders fear overseas sales could have taken a dive.
However, latest figures show Bangladesh's ready-made garment exports are continuing to soar, rising by nearly 21% in the first five months of the current fiscal year.
Apparel exports rose to US$9.65bn in the period from July to November, up from $7.99bn a year earlier - exceeding targets set at $9.20bn.
Within this, woven garment exports grew by 21% to $4.75bn during the five months, from $3.93bn last year; while knitwear exports grew by 20.48% to $4.90bn from $4.07bn, according to statistics from the state-run Export Promotion Bureau (EPB).
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