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Translated by
Nicola Mira
Published
Jul 20, 2021
Reading time
3 minutes
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Lockdown threat looms over Asian textile industry

Translated by
Nicola Mira
Published
Jul 20, 2021

On July 23 and for two weeks, Bangladesh will impose a new national lockdown that will ground the textile industry, the local economy’s backbone, to a halt. The decision is concerning for local producers and exporters, since this is usually a key period of activity for them. Meanwhile, the WTO fears an acceleration of the Delta variant’s spread in other countries, including Pakistan, Sri Lanka, Thailand and Indonesia.


A factory in Dhaka last May - Shutterstock


The situation in Bangladesh, the world’s second largest textile/apparel exporter after China, is of course closely monitored. "The months of June, July and August are our peak season for apparel exports, notably for winter clothes,” said Shahidullah Azim, vice-president of the Bangladeshi Garment Manufacturers and Exporters Association (BGMEA).

“Bangladesh exports about 40% of its apparel output during this period. Factory closures at this crucial time of the year could prompt our clients to cancel their orders,” he added.

Local producers are worried that many leading Western brands will immediately choose to transfer their orders to other countries. And this even as Bangladesh has reportedly seen its apparel exports bounce back after April, thanks to the Fall/Winter 2021-22 collections, with revenue in the July 2020 to June 2021 period growing to $34.13 billion, equivalent to a 12.55% rise.


Dhaka during the first lockdown in spring 2020 - Shutterstock


According to industry representatives, a one-week lockdown would have been preferable. To justify this, they argued there is a strong possibility that workers would take advantage of the closures to re-join their distant families, at the risk of further spreading Covid-19. A risk heightened by the fact that Muslims celebrate Eid al-Adha on July 19-23.

Bangladeshi textile companies also pointed out that the situation could push foreign buyers elsewhere, at a time when exporters would normally be securing their orders for the Spring/Summer 2022. In addition to this, there is the current international transportation crisis which, besides a spike in prices, is causing delays.

“Because of the lockdown and the maritime transportation crisis, garment exporters are only receiving their raw materials a month after ordering them,” said Abdullah Hil Rakib, head of BGMEA. “For the same reason, we also asked buyers to accept shipments at the end of July for products that were supposed to be shipped in May,” he added.

Asian textile industry facing multiple lockdowns



Among the countries that could seize the opportunity to grab market share off Bangladesh, BGMEA naturally mentioned China. But also Vietnam (the EU’s sixth largest apparel supplier in 2019), which on June 18 imposed a two-week lockdown in its entire southern region, including Ho Chi Minh City, where the bulk of the local textile manufacturing industry is concentrated. Bangladesh is also monitoring the situation in neighbouring India (the EU's fourth largest apparel supplier), where local lockdowns are also being imposed.


A Vietnamese garment factory in Ho Chi Minh City - Shutterstock


The Covid-19 crisis has also hit other key textile/apparel countries in South-East Asia. This is notably the case of Indonesia (the 12th largest EU apparel supplier in 2019) which is in lockdown until July 20, and where the positivity rate is reportedly 60% of the population, while only 5% have been vaccinated.

The situation is also critical in Thailand (the 15th EU apparel supplier), where 4% of the population has been vaccinated. The Thai Prime Minister however has ruled out a national lockdown, talking about “accepting the risk so that Thais can earn a living.”

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