Shortage of supply from China hampers production

Coronavirus has had an impact on the import of raw materials and commercial items from China, say Bangladeshi businessmen.

They said export of items in April and May will be hampered as the loading of raw materials in China has not started yet, meaning the arrival of raw materials will be delayed by two weeks.

Many factories are yet to go for operation although cautionary leave in several provinces in China ended on Monday.

On the contrary, many factories will start their operation after 18 and 20 February. So it will take time to receive accessories for the garments sector.

Bangladeshi entrepreneurs will suffer for the next few months as the supply system is hampered.

MV Knit Fashion in Narayanganj was supposed to export RMG products for women to the UK at the end of this month.

Accessories for manufacturing these products were supposed to be shipped from Shanghai port of China on 2-3 February. But the shipment could not be done.

Owner of the company and BKMEA senior vice president Mohammad Hatem on Tuesday said, “I have talked to the supplier. Their office will be opened on 20 February. The shipment may take place on 25 February. There is no possibility to export the items this month.”

General manager of HKD International in Chattogram, Mohammad Shahidullah, said raw materials for their export-oriented factory were scheduled to be loaded at a China port on 7 February. The deadline has been rescheduled to 17 February. “We don’t know if the new date will be changed again or not,” he added.

Import of raw materials decreases

Cosco Shipping Lines carries commodities in three ships to Chattogram from the Yangpu port of China.

A ship (MV Novosheva) of the company in each trip carries 300 to 400 containers from China.

The Chattogram-bound ship with only 141 containers is now on the way from China via Singapore.

Five ships of South Korea-based Shipping Lines also carry commodities from China.

St John, one of the five ships, has got 100 containers less than the usual number.

Continental Traders’ sister concern Ocean International in Chattogram is a local agent of Korea-based Hyundai Merchant Marine.

Continental Traders is also the local agent of China COSCO Shipping Lines.

Speaking to Prothom Alo, managing director of Continental Traders Ahsan Iqbal Chowdhury said the current trend says the import of commodities from China will decrease further.

Arrival of ships rescheduled
Export oriented shoe sole manufacturing firm RJM Footwear’s managing director Jasim Ahmed said a consignment of raw materials for his shoe factory was scheduled to arrive in Chattogram via Malaysia from China on 31 January.

He said he will get the consignment after two weeks as Malaysia did not allow to anchor the ship at its port until 14 days of quarantine is over due to coronavirus. As a result, production of one line of his factory is kept suspended.

Impact on the industry

The export-oriented RMG sector is feared to be affected the most.

In the fiscal 2018-19, RMG products worth over $34 billion were exported while raw materials worth $12.17 billion had arrived from China.

Besides, major portion of accessories for garments factories comes from China. Raw materials of leather and pharmaceuticals also come from China.

Centre for Policy Dialogue (CPD) distinguished fellow Mustafizur Rahman said the impact of coronavirus has already started. The price of some food items has increased, he said adding that there is an uncertainty about the arrival of accessories and raw materials.

Mustafizur Rahman said, “We have to look for alternative sources for raw materials. But we must consider the price and shipment time of items to be imported.”

The CPD researcher said the foreign investors are looking for alternatives to China. Bangladesh policymakers should avail the opportunity by completing the construction of economic zones, Mustafizur suggested.

*This report, originally published in Prothom Alo's print edition, has been rewritten in English by Rabiul Islam