“We are not sure about how much time it will take to return to normalcy similar to the previous years’ market,” says Ahsan H Mansur, executive director of Bangladesh Policy Research Institute
Export earnings from the coronavirus-hit apparel sector might decline by $6 billion to around $28 billion in the fiscal year 2019-20 from $34 billion a year before.
In this way, the country's largest export earning sector would see a $10 billion shortfall in achieving its target of over $38 billion for the just-concluded fiscal year.
The readymade garment sector slightly bounced back with about $2.1 billion in earnings in the last month of the fiscal year 2019-20, according to unofficial customs data.
The country fetched $1.99 billion in apparel exports between June 1 and June 29, said a top official at Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
The BGMEA compiled the data from the National Board of Revenue.
The sector's earnings were $2.39 billion in June 2019, according to the Export Promotion Bureau (EPB).
In the last eleven months (July to May) in the just-concluded fiscal year, apparel exports dropped by 18.99% to $25.70 billion over the corresponding period in the last fiscal year.
The exports registered a 54.79% negative growth during the coronavirus pandemic from March to May, according to the BGMEA data.
Exporters hope that the apparel sector will make a turnaround by the next six months if the pandemic situation improves.
"I believe that it is a signal for recovery of the appeal sector," said Fazlul Haque, managing director of Plummy Fashions Ltd, the greenest knitwear factory in the world.
"If the world recovers from the pandemic, it will take about six months to regain the earlier position with about $3 billion exports a month on average," he added.
"In June, we had some orders intact as buyers did not cancel those when they observed the pandemic situation was improving. Besides, we restored some cancelled orders after long negotiations with the buyers," he also said.
However, economists are concerned about the market outlook apprehending a second wave of coronavirus in the European Union (EU).
There are two reasons behind growth in June – one is the improvement of the coronavirus situation in the EU and another is the dip of exports during the May Eid vacation this year which was made up in June, says Ahsan H Mansur, executive director of Bangladesh Policy Research Institute.
He further explains that every Eid season, the country sees a slowdown in exports and that slack is picked up in the next month raising the figure.
The economist thinks that the demand for apparel items has been increasing in the global market as the EU started to recover from coronavirus, while the US is seeing a resurgence of the virus.
"We are not sure about how much time it will take to return to normalcy similar to the previous years' market," he added.
The apparel industry's recovery will depend on how much orders exporters would get in the next two seasons of winter and spring.
The buyers will place orders with short-time forecasts, taking into consideration the Covid-19 situation.
"If the second wave of coronavirus outbreak hits the EU, it may take a long time to recover but we have no idea how much time it will take," said Ahsan H Mansur.
The monthly above $2 billion export earnings will continue till August and might decline a bit between September and December. Because the exporters make products during the period for selling those in the next summer season during May-June, said Fazlee Shamim Ehsan, managing director of Fatullah Apparels Ltd.
They will also see 30% fewer work orders as retailers already have a good amount of stock of ready goods for the next season, he added.
The apparel export contributed 84.21% to the total export receipts in the last fiscal year. The sector posted 11.49% growth to $34.13 billion in the fiscal year 2018-2019, of them, Knitwear items earned $16.88 billion and woven products fetched $17.24 billion, according to the EPB data.