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Bangladesh export-import may be affected by coronavirus: Commercial counsellor
Rajib Ahmed . Dhaka | Update: 16:11, Feb 27, 2020
https://en.prothomalo.com/bangladesh/news/209995/Bangladesh-export-import-may-be-affected-by
Bangladesh’s import and export may be affected due to the coronavirus outbreak in China.
This was predicted in a letter of Bangladesh commercial counsellor in China and in a report of a government the agency.
Bangladesh commerce counsellor in China, Mohammad Mansur Uddin, on Monday sent the letter to Federation of Bangladesh Chambers of Commerce & Industries (FBCCI). Bangladesh Trade and Tariff Commission (BTTC) prepared the report in this regard.
The letter and the BTTC report gave a bleak picture regarding the country’s export and import sectors.
China is a major source of raw materials, spare parts and equipment. Even pharmaceutical raw material is also imported from China.
China is also the destination of Bangladesh’s export items like leather, jute and crabs.
In the financial year of 2018-19, Bangladesh imported items worth 13.85 billion US dollars from China, which is 25 per cent of total import. Bangladesh exported commodities worth .83 billion US dollars to China, which is two per cent of total export.
Businessmen said it is difficult for others to immediately supply huge amount of commodities in low cost like China.
Speaking to Prothom Alo, tariff commission member Mostafa Abid Khan said not only Bangladesh but also global supply will be affected due to coronavirus.
China is a big source of semi-finished goods. Bangladesh mills and factories will be affected if the supply of semi-finished goods is hampered.
Letter from China
The letter from the commercial counsellor was also sent to the commerce ministry, the Export Promotion Bureau (EPB) and Bangladesh-China Chamber.
All government offices and most of the private sector organisations have started functioning after long holiday in China. The customs office, ports and banks have started operations. In some cases, the employees are working from their homes. Some offices are operating with only a few numbers of employees.
Small and medium enterprises face delay to get government permission to start their operations.
Mansur Uddin also mentioned some provinces in China are running their factories with a limited number of workers.
In some cases, workers are unable to reach their workplace as communications remain shut. Workers’ attendance in factories is 40-60 per cent, according to entrepreneurs in some provinces except Hubei.
It is suspected that coronavirus first broke out in Wuhan, the capital of Hubei province in China. It is a big hub of industries and transports. The city is commercially important due to electronics and car parts, garments, needle and textiles, printing and dying, and shoe factories. Wuhan is also a centre of railway communications with other big cities.
Mansur Uddin said a total of 16 cities including Hubei are shut down and it is not known when these cities will resume functioning.
Hubei is the centre of production and export of the global pharmaceutical raw material, Active Pharmaceutical Ingredient (API).
Referring to a report of a Chinese newspaper, the commercial counsellor said API production is now suspended. A total of 12 per cent of API is produced in Hubei. API production is also suspended in other provinces too.
He mentioned in the letter that exports of garments, leather and leather related commodities and crabs may be affected.
The commercial counsellor, however, said there will be no problem in importing ginger and garlic.
He mentioned Chinese people, who went home, are facing problems in rejoining their work in different projects in Bangladesh.
Bangladesh Pharmaceutical Industries Association secretary general SM Shafiuzzaman said pharmaceutical companies generally stock raw materials for three to four months.
There will be no problem for Bangladesh if the problem in China is over by March, he said adding that a crisis of medicines was apprehended if the factories do start operations by March.
Asked about other sources, SM Shafiuzzaman said, “We import some from India. India also imports semi-finished goods from China.”
Thirteen sectors
The tariff commission on Sunday sent a report to the commerce ministry over the China coronavirus outbreak. The report mentioned the negative impact on 13 sectors. The sectors include readymade garments, leather, accessories for RMG, electronic items, pharmaceutical items, printing industries and plastic industries.
Tariff commission says 60 per cent of woven fabric comes from China. Raw materials of 20 to 15 per cent of knit fabric are imported from China and China is a big source of chemical dye.
The reports hint that the possible loss in leather sector will stand at Tk 30 billion dollars. Eighty per cent of electronic items come from China.
The coronavirus outbreak has already started affecting trade and commerce in Bangladesh.
Businessmen said prices of industrial raw materials, semi-finished goods, spare parts, electric and electronic parts are increasing. But the situation is not alarming.
Businessmen said the impact will start from the second week of March. Businessmen stocked goods ahead of China New Year festival. But the crisis will be after a few weeks.
Top RMG exporter and Viyellatex chairman KM Rezaul Hasnat said, “It has become uncertain to import raw materials from China. They are assuring us of supplying commodities in time. When asked about opening their factories, they are reluctant to answer.”
“We will be able to understand in the first week of March whether they will be able to supply goods or not,” he added.
Seeking not to be named, a cell phone assembly company chief executive said they stocked items ahead of China New Year festival.
Whether there will be any problem or not will be realised in March, he added.
Viyellatex chairman Rezaul Hasnat said Bangladesh has the capacity to produce accessories and fabric for the garments sector.
“But we have to import from China as the buyers set conditions. The buyers can allow purchasing these from Bangladesh under the present circumstance.”
Centre for Policy Dialogue (CPD) special fellow Mustafizur Rahman foresees an opportunity in investment and export.
He said the buyers have been thinking another source country alongside China. This is called ‘China plus one’. Now it is now proved that absolute dependence on China is not good.
Mustafizur Rahman has given suggestions to closely monitor China situation and find source for short period of time.
The government should lessen duty for a short period to protect the consumers and business community, he added.
Mustafizur also suggests to prepare seizing the opportunity of investment and purchase order of those who are going to shift from China.
Rajib Ahmed . Dhaka | Update: 16:11, Feb 27, 2020
https://en.prothomalo.com/bangladesh/news/209995/Bangladesh-export-import-may-be-affected-by
Bangladesh’s import and export may be affected due to the coronavirus outbreak in China.
This was predicted in a letter of Bangladesh commercial counsellor in China and in a report of a government the agency.
Bangladesh commerce counsellor in China, Mohammad Mansur Uddin, on Monday sent the letter to Federation of Bangladesh Chambers of Commerce & Industries (FBCCI). Bangladesh Trade and Tariff Commission (BTTC) prepared the report in this regard.
The letter and the BTTC report gave a bleak picture regarding the country’s export and import sectors.
China is a major source of raw materials, spare parts and equipment. Even pharmaceutical raw material is also imported from China.
China is also the destination of Bangladesh’s export items like leather, jute and crabs.
In the financial year of 2018-19, Bangladesh imported items worth 13.85 billion US dollars from China, which is 25 per cent of total import. Bangladesh exported commodities worth .83 billion US dollars to China, which is two per cent of total export.
Businessmen said it is difficult for others to immediately supply huge amount of commodities in low cost like China.
Speaking to Prothom Alo, tariff commission member Mostafa Abid Khan said not only Bangladesh but also global supply will be affected due to coronavirus.
China is a big source of semi-finished goods. Bangladesh mills and factories will be affected if the supply of semi-finished goods is hampered.
Letter from China
The letter from the commercial counsellor was also sent to the commerce ministry, the Export Promotion Bureau (EPB) and Bangladesh-China Chamber.
All government offices and most of the private sector organisations have started functioning after long holiday in China. The customs office, ports and banks have started operations. In some cases, the employees are working from their homes. Some offices are operating with only a few numbers of employees.
Small and medium enterprises face delay to get government permission to start their operations.
Mansur Uddin also mentioned some provinces in China are running their factories with a limited number of workers.
In some cases, workers are unable to reach their workplace as communications remain shut. Workers’ attendance in factories is 40-60 per cent, according to entrepreneurs in some provinces except Hubei.
It is suspected that coronavirus first broke out in Wuhan, the capital of Hubei province in China. It is a big hub of industries and transports. The city is commercially important due to electronics and car parts, garments, needle and textiles, printing and dying, and shoe factories. Wuhan is also a centre of railway communications with other big cities.
Mansur Uddin said a total of 16 cities including Hubei are shut down and it is not known when these cities will resume functioning.
Hubei is the centre of production and export of the global pharmaceutical raw material, Active Pharmaceutical Ingredient (API).
Referring to a report of a Chinese newspaper, the commercial counsellor said API production is now suspended. A total of 12 per cent of API is produced in Hubei. API production is also suspended in other provinces too.
He mentioned in the letter that exports of garments, leather and leather related commodities and crabs may be affected.
The commercial counsellor, however, said there will be no problem in importing ginger and garlic.
He mentioned Chinese people, who went home, are facing problems in rejoining their work in different projects in Bangladesh.
Bangladesh Pharmaceutical Industries Association secretary general SM Shafiuzzaman said pharmaceutical companies generally stock raw materials for three to four months.
There will be no problem for Bangladesh if the problem in China is over by March, he said adding that a crisis of medicines was apprehended if the factories do start operations by March.
Asked about other sources, SM Shafiuzzaman said, “We import some from India. India also imports semi-finished goods from China.”
Thirteen sectors
The tariff commission on Sunday sent a report to the commerce ministry over the China coronavirus outbreak. The report mentioned the negative impact on 13 sectors. The sectors include readymade garments, leather, accessories for RMG, electronic items, pharmaceutical items, printing industries and plastic industries.
Tariff commission says 60 per cent of woven fabric comes from China. Raw materials of 20 to 15 per cent of knit fabric are imported from China and China is a big source of chemical dye.
The reports hint that the possible loss in leather sector will stand at Tk 30 billion dollars. Eighty per cent of electronic items come from China.
The coronavirus outbreak has already started affecting trade and commerce in Bangladesh.
Businessmen said prices of industrial raw materials, semi-finished goods, spare parts, electric and electronic parts are increasing. But the situation is not alarming.
Businessmen said the impact will start from the second week of March. Businessmen stocked goods ahead of China New Year festival. But the crisis will be after a few weeks.
Top RMG exporter and Viyellatex chairman KM Rezaul Hasnat said, “It has become uncertain to import raw materials from China. They are assuring us of supplying commodities in time. When asked about opening their factories, they are reluctant to answer.”
“We will be able to understand in the first week of March whether they will be able to supply goods or not,” he added.
Seeking not to be named, a cell phone assembly company chief executive said they stocked items ahead of China New Year festival.
Whether there will be any problem or not will be realised in March, he added.
Viyellatex chairman Rezaul Hasnat said Bangladesh has the capacity to produce accessories and fabric for the garments sector.
“But we have to import from China as the buyers set conditions. The buyers can allow purchasing these from Bangladesh under the present circumstance.”
Centre for Policy Dialogue (CPD) special fellow Mustafizur Rahman foresees an opportunity in investment and export.
He said the buyers have been thinking another source country alongside China. This is called ‘China plus one’. Now it is now proved that absolute dependence on China is not good.
Mustafizur Rahman has given suggestions to closely monitor China situation and find source for short period of time.
The government should lessen duty for a short period to protect the consumers and business community, he added.
Mustafizur also suggests to prepare seizing the opportunity of investment and purchase order of those who are going to shift from China.
- This report, originally published in Prothom Alo print edition, has been rewritten in English by Rabiul Islam
