While agreeing not to cancel their orders, western clothing brands are asking for a 50% discount from Bangladeshi garment factories, adding to their economic woes, the manufactures group said on Friday.
Hit hard by the coronavirus pandemic, the country’s garment industry of which millions of households depend, suffered deeply with exports fell by 84% in the first half of April as US$3 billion-worth of orders were cancelled or suspended by western retailers, factory owners said.
“We are still observing their departure from original contract terms… which includes renegotiating prices as low as 50% of the original deal,” said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association.
Ranking second to China as a supplier of clothes to Western countries, Bangladesh relies on the garment industry for more than 80% of its exports, with some 4,000 factories employing about four million people, mostly women.
Huq said many of the western clothing company had yet to say when they would pay or take delivery, accusing them of “following a strategy to buy time”.
“We are not aware of any other brand except one that has declared its plan in detail regarding delivery and payments centrally in black and white,” said Huq, citing Swedish fashion giant H&M, the biggest buyer of garments from Bangladesh.
“(The) rest have all been conditional, mostly based on deferred payments, discounts and deferred deliveries.”
Kalpona Akter, a labour activist, warned that workers would bear the brunt of reduced or renegotiated orders.
“We will be able to see the impact by next month, when workers will have to be paid their Eid bonuses and salaries,” she said.
With Western economies struggling due to the crisis and retailers in many countries closed, brands have begun cancelling orders, though some have pledged to take delivery of garments already made or in production.
A government official said cancelling or renegotiating orders was unjust and authorities were addressing the issue through diplomatic negotiations.
“Our factory owners have spent a lot of money to be compliant and safe. It’s an injustice to still not get good prices,” MdJafaruddin, secretary of the Ministry of Commerce, told the Thomson Reuters Foundation.
The government announced a US$588 million package to help the crucial export sector pay its workers last month.
Labour leaders say that this is not enough and that buyers need to come forward to support workers.
Hundreds of workers took to the streets this week, defying a government lockdown to protest the non-payment of wages, according to police. (Source: Thomson Reuters Foundation)