The apparel sector is possibly going to take a hit for the next 3-4 months

Apparel sector leaders on Friday said they are being forced to pay high prices for procuring accessories and raw materials, because the coronavirus (Covid-19) outbreak is disrupting their supply chains.

In a statement, Bangladesh Garment Manufacturers and Exporters Association's (BGMEA) President Rubana Huq said, "Prices of all garment accessories, including yarn and sewing threads, are going up. It has already increased by almost 50 percent. This is killing us.

"If regular shipments from China does not resume within the next two weeks, we will not be able to properly procure any trim, as most of the raw material is imported from China. Those items include yarn, sewing thread, paper and plastic items (such as buttons) and twill tape."

Rubana Huq added that even the dyeing cost is increasing "unacceptably" and in general, the apparel sector is possibly going to take a hit for the next three-four months.

Mohammad Abdur Rouf, executive director of Dekko Accessories Ltd, one of the leading accessories companies in Bangladesh, echoed the BGMEA statement, saying, "The prices have increased because a group of local traders are selling raw materials for higher prices using the coronavirus outbreak as an excuse.

"Usually, every Bangladeshi trader and accessories maker keeps a good stock ahead of the Chinese Lunar New Year holidays to cover their production up to March. However, some of the importers are trying to create an artificial crisis in the market and demanding high prices for raw materials."

Abdur Rouf further said, "Now, we are procuring some raw materials from the local market for 30 percent higher prices on average. For us, delivering orders to our buyers is the most important, so we are not considering our profit margin for now.

"Some are trying to cash out using the corona outbreak issue. We hope that the crisis will ease in the next two-three weeks."

Meanwhile, the Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association's President Abdul Kader Khan told The Business Standard, "We have yet to increase the prices. We usually submit a notice at least 45-60 days before hiking the prices.

"This is not a one-sided process. Any change in prices is done by negotiating with garment factories and buyers."

He added that the price of sewing thread for polyester fabrics may have gone up as this specific raw material is imported only from China.

"Despite the outbreak, some offices in China have started their operations. I have learned that a shipment from China is bound for my factory and it is a good sign," said Abdul Kader Khan, who is also the managing director of Khan Accessories & Packaging Co.

He expressed optimism that he will be able to receive the shipment documents by next week and the goods within the next 20-25 days.

China has reportedly opened some of the factories in different provinces except Hubei where Covid-19 outbreak reportedly originated. The presence of workers in these factories is around 40-60 percent, said a February 24 letter of the Commercial Wing of Bangladesh Embassy in China.