Businesspeople express worries about their financial loss but do not know how much they are affected
Bangladesh's manufacturing and export-oriented industries have certainly incurred a loss due to the outbreak of coronavirus in China, but they are yet to determine the actual volume of it, said industry people.
They expressed serious concerns over possible negative impacts on their businesses because of the virus outbreak which caused delays in import from and export to the East Asian country.
The concerns come justified as most of the Bangladeshi industries import basic raw material and other products worth around $14 billion from China.
In this circumstance, the commerce ministry has asked the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) to submit a report on how much they have been affected by the outbreak of the coronavirus.
The federation on Saturday sent a letter to all of its member associations and chambers, asking for their reports in this regard within three days.
In the letter, the FBCCI asked the members to provide information about impacts on five key areas: the daily commodity supply and price scenario, the import-export business, the import of basic raw, intermediate material and finished products, the industrial production, and the service sector.
They also wanted to know how the present business depression may affect the country's commodity market during the upcoming Ramadan.
"We have no data as to which sector is affected to what extent due to the virus outbreak. We asked for information from our members because the ministry sought it from us in Thursday's meeting," said Munir Hossain, a director of the FBCCI.
He also mentioned that the federation will be able to collect all information by the next week.
Meanwhile, the industry people said they are certain about a big loss in their business. But they are yet to determine the amount.
"We are much worried, but we do not know how badly we are affected," said Md Siddiqur Rahman, the chairman of the Starling Group, one of the leading apparel exporters.
"As an apparel manufacturer, I am dependent on China to source a major portion of raw material. However, not my sector alone, most of the manufacturing industries will be badly hit by the coronavirus, said Siddiqur, who is also the FBCCI vice president.
This unexpected coronavirus outbreak will shake not only Bangladesh, but also the global economy if China fails to control the situation immediately, he added.
Another woven garment exporter, preferring anonymity, said his company might already have faced a big loss as the shipment of raw material from China has been delayed for some days.
"We do not know when China will open the Shanghai seaport," he added.
The woven apparel exporter also mentioned that he would not able to move to another source of raw material until the Chinese side confirms him about their cancellation of orders.
"One special area of concern is the raw material for woven apparel sector, particularly fabrics, which are sourced from China. There could be disruptions in the woven supply chain due to this issue," said Asif Ibrahim, director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
He said the immediate short-term effects are the cancellation of the scheduled direct meetings with both suppliers and buyers. However, meetings are being held through video-conferencing and other alternative means.
"Besides, the medium and long-term effect is difficult to determine. The orders that the global brands place in China may be shifted for a season to other countries such as Bangladesh, Vietnam, Cambodia, India etc. However, the volume of the orders cannot be determined right now," added Asif Ibrahim, vice chairman of Newage Group.
Apparel sector may be affected: Commerce minister
The commerce minister also warned that the global economic depression caused by the virus outbreak may affect Bangladesh's economy.
Commerce Minister Tipu Munshi said the government fears adverse impacts on Bangladesh's readymade garments (RMG) sector due to the coronavirus outbreak in China.
However, there is no reason for a price hike of daily commodities like onion, garlic, ginger etc due to the virus outbreak. But it can have an impact on material related to the RMG sector, the minister told journalists while inaugurating a business fair in the capital on Sunday.
Concern for leather sector
The country's leather exporters are going to be hit hard for the coronavirus outbreak in China, which is their largest export destination, industry players said.
They fear, if the situation prolongs, they may face huge financial losses as products amounting to about Tk120 crore may end up being stockpiled.
"Around 100 containers of semi-finished leather remain pending for export to China. If the situation there does not improve in the next two weeks, we may face huge losses," said Shaheen Ahmed, the chairman of the Bangladesh Tanners Association.
FM Rafiqul Islam, director (technical) of the Dhaka Hides, said they have 15 Chinese buyers who have not been communicating with them since the last week of December.
"We may face a stock lot of leather worth about $1.2 million. We are worried about the development," Islam said.
He said each large tannery may face a stockpile of leather worth about Tk10 crore to Tk12 crore if the Chinese holiday, that has been extended till February 17 due to the coronavirus outbreak, lingers on.
Islam estimated that altogether big tanners' losses will be around Tk100 crore to Tk120 crore.
Manufacturing too may face damaging effects
Bangladesh electrical and electronics manufacturers and exporters said their industry is also highly dependent on China for basic raw materials like powder for refrigerator door foaming, plastic raw material, led
lights' transistor and circuit breakers etc.
Bangladesh Mobile Phone Manufacturers' Association officials said this industry is also dependable on Chinese technology and raw material.
The pharma sector is also in deep fear as they too import raw material and chemicals from China.