Bangladesh apparel manufacturers are concerned that political turmoil will see foreign buyers shift orders to other countries as they face difficulties fulfilling orders on time.

General strikes have meant that many apparel exporters have failed to meet shipping deadlines, while others have had to resort to costlier air freight, pushing up the overall cost of production.

"The overall cost of production in the apparel sector has increased by 20-25%, due to the recent political turmoil and frequent general strikes," Atiqul Islam, president-elect of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told just-style on Thursday (21 March).

He also said some foreign buyers have suspended or cancelled their visits to Bangladesh. "Many of them already have threatened to cancel shipments and orders."

Siddiqur Rahman, outgoing vice-president of the BGMEA, said that while the ready-made garment (RMG) sector is not excluded from the general strike, the transport of garment products is not. "So, it is very difficult to keep shipment deadlines."

Rahman emphasised that timelines are crucial, as even an hour's delay in shipment can increase the likelihood of discounts, cancellation, deferred payment and losses.

According to the Federation of Bangladesh Chambers of Commerce and Industry statistics, the country loses BDT20bn (US$255.1m) per day of striking. Of that loss, the RMG sector is losing BDT3.6bn (US$45.91m) a day.

A BGMEA official told just-style that the country's over 5,000 RMG businesses have lost BDT1.50bn (US$19.13m) per day of striking in production disruption.

Apparel exporters are also concerned that the continuous general strikes might lead global buyers and retailers to move their orders to other countries like Cambodia and Vietnam.

"The buyers are now thinking of shifting their orders from Bangladesh to other destinations like Cambodia and Vietnam, as they are afraid that the Bangladeshi exporters might not be able to make timely shipments due to the political unrest," Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), told just-style.

Hoque also said the buyers might not stop their orders completely but diversify or reduce them amid the uncertainty.

Challenges are being compounded by macro-economic issues in Bangladesh's two main traditional apparel export markets - the US and European Union.

The government and private sector are looking to diversify the market and has identified Australia, Brazil, Chile, China, India, Korea Republic, Mexico, Russia, South Africa and Turkey as emerging markets for Bangladesh made apparel. 

The ongoing market diversification efforts may face setback if the political turmoil and frequent general strikes will continue," he said, adding that new buyers from emerging markets may hesitate to place orders in Bangladesh.

The ongoing political violence and frequent general strikes have been hampering theall of the apparel sector's activities, including the import of raw materials and shipment of products.

The opening of back-to-back letters of credit (LCs) for fabrics, accessories and other garment industry products, and LCs opening for cotton yarn fell to $425.87m and $25.47m respectively in February from $655.95m and $34m in the prior month, according to the Bangladesh Bank (BB).

"The declining trend in opening of the LCs against imports might continue until the prevailing confrontational political situation improves," a senior official of a leading private commercial bank told just-style. 

He also said political skirmishes sparked by the verdicts of the International Crimes Tribunal (ICT) and the issue of the 'caretaker government' have discouraged businesses from importing different commodities during the month.