In December last year, the pandemic broke out in China, and has now spread to over 115 countries. For the first time in Bangladesh on March 8th, three people were screened positive for coronavirus, and two more cases have been identified recently.
Goods are piling up in ready-made garment factories in Bangladesh. Buyers from European countries have asked their suppliers to delay the shipment of the product due to the COVID-19 outbreak. This means that the factories would suffer tremendous losses in placing shipments on hold and will face a shortage of working capital as payment from customers will be delayed before product delivery. So due to the shipment delay, they face difficulties including space shortage in warehouses and lack of running money. Manufacturers manufacture goods that take bank loans against back-to-back letters of credit, and now bank loans taken from factory owners may be listed due to failure to pay.
Buyers tend to postpone shipments for a few weeks as shops in buyers ‘ countries are facing a declining number of shoppers due to coronavirus outbreaks. Some purchasers in Europe, especially from Italy, Spain and Ireland, have cancelled orders and some have downsized their needs.