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  • Last Update : 01:36 am

Coronavirus in China: Raw materials supply disruption may hinder local industries

  • Published at 10:04 pm February 2nd, 2020

Two major sectors such as garment and leather could be hit hard if the outbreak of the deadly disease prolonged, feared industrialists

Supply chain of imported raw materials essential for the export-focused manufacturing industries in the country would be hindered badly as the outbreak of Coronavirus in China cast a negative impact on communication and goods movement.ca

Two major sectors such as garment and leather could be hit hard if the outbreak of the deadly disease prolonged, feared industrialists. 

Some entrepreneurs, however, predict the outbreak of Coronavirus in China might cause relocation of export orders by western brands from China to Bangladesh.

Besides, implementations of large and mega infrastructure projects could face uncertainty for brief to long period amid travel restriction as a handful number of Chinese technical and skilled workers are engaged in most of the local large projects.

The government yesterday decided to stop on arrival visas for Chinese nationals.

China is the number one trade partner of the country.  Last fiscal year, China-Bangladesh bilateral trade stood at $14.48 billion. 

According to Bangladesh Bank data, Bangladesh imported goods worth $13.65 billion, while it exported products of $831.2 million to China in 2018-19 fiscal year.

“In the bilateral trade, there is already a temporary impact felt as the communication between the two countries is reduced, so are  the movements of goods,” A T M Azizul Akil, senior vice president of Bangladesh-China Chamber of Commerce and Industry (BCCI) told Dhaka Tribune.

The big impact would  be on the implementation of  mega projects as the workers who went to china to celebrate new year could not return due to restriction on travel, Azizul added.

Around 13,000 Chinese nationals are working in the country’s different manufacturing units and mega projects including Padma Bridge, Karnaphuly Tunnel and Dhaka bypass Express way.   

Most of the raw materials including fabrics, yarn, garment accessories and other accessories like plastic mould are regularly imported from China for local manufacturing sector.

“Our company has faced cancellation of an import order of five ton raw materials from a Chinese supplier, which was scheduled to reach last week,” seeking anonymity, an official of a garment accessories manufacturer company, told Dhaka Tribune. 

On the other hand, the company officials also cancelled their  next trips to China over coronavirus fear.    

Bangladesh exported apparel goods worth $ $506 million to China in last fiscal year.     

According to Chinese media report, more than a dozen Chinese provinces announced an extension of the current Lunar New Year holiday by more than a week as the nation attempts to halt the spread of the coronavirus that has killed hundreds of people and sickened thousands.    

“Sales of big retailers are falling due to closures of stores in mainland China. Sales expected to drop further and therefore sourcing of products for Bangladesh may also decrease,” Bangladesh Garment Manufacturing and Exporters Association (BGMEA) president Rubana Huq told Dhaka Tribune.  

On the other hand, some immediate orders from China are expected to be shifted to other countries including Vietnam, Cambodia and Bangladesh, hoped the business leader.

Commenting on the alternative sourcing of raw materials, Rubana said the entrepreneurs could turn to local fabric mills and regional countries to source their products.

 Business people sought the government’s steps to keep import and export operational by taking protective and cautionary measures.    

Instead of sealing off ports or stopping import from china, the government should strengthen safety measures and develop a medical checkup system so that enough protective measures could be ensured to help enter Chinese raw materials in the country, recommended Azizul.

He also suggested for an alternative sourcing mechanism for goods the country needs to import on regular basis to avert any crisis or disruption in supply chain.       

In December last year, the coronavirus outbroke in central Chinese city, which is believed to have originated in the central city of Wuhan and is spreading across the country and in other 10 countries. 

According to South China Morning Post report, the death toll stood at 305, while 14,562 people infected.    

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