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Coronavirus prompts retailers to scrap US$1.5 billion of Bangladesh orders

EUROPEAN and American buyers including Primark, the budget fashion chain owned by Associated British Foods, have cancelled about US$1

27 March 2020 - 05:48

EUROPEAN and American buyers including Primark, the budget fashion chain owned by Associated British Foods, have cancelled about US$1.5 billion of Bangladesh garment orders as the coronavirus outbreak stymies demand, Bloomberg reports.

As many as 1,089 Bangladeshi garment factories have seen orders scrapped, Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association said. That's impacting lives of 1.2 million workers, she said.



While Bangladesh, the world's biggest garment exporter after China, has been relatively unscathed with 27 virus infections, order cancellations may hit the economy hard. Readymade clothing factories employ more than four million people and the industry accounts for 13 per cent of the South Asian nation's gross domestic product.



'I urge you all to kindly steer through this crisis together,' Ms Huq wrote in a letter to retailers, urging them not to cancel orders. 'Let the production go on. In case of urgency, we can accept deferred payment.'



The order cancellations are a setback for Bangladesh, which has been making steady economic gains with growth set to expand more than seven per cent for the fifth straight year, as per pre-virus forecast from the International Monetary Fund.



The administration headed by Prime Minister Sheikh Hasina has spearheaded policies that had boosted per-capita income - estimated by the IMF to $1,906 last year - was almost on par with India's $2,172.



'Brands who were partners last month have all turned into strangers,' Ms Huq said. 'We call upon the international community to surface with a renewed pledge to support the workers of Bangladesh, if not just the businesses.'



Primark which has no online sales, is using a force majeure clause in its contracts to cancel orders, London's Sunday Times reported citing Chief Executive Officer Paul Marchant. Primark operates 376 stores in 12 countries.


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