Virus outbreak in EU may impact Myanmar garment exports

The spread of COVID-19 to some EU countries could impact demand for Myanmar-produced garments even as the supply of Chinese raw materials involved in the process becomes less volatile, said Daw Khine Khine Nwe, secretary general of the Myanmar Garment Manufacturers Association.

More than 70 percent of Myanmar’s garment products are exported to the EU. As such, the Myanmar garment industry still relies on the EU even though it also exports to Japan, Korea, Canada, US, China and other countries.

So far, Italy has confirmed more than 5,800 cases of COVID-19, the highest number of in the EU, according to the World Health Organisation. Germany, France and Spain have also reported cases.

The outbreak in the EU could hurt export demand and deal another blow to Myanmar just as the garment export sector is facing a raw materials shortage as a result of a slowdown in Chinese production.

Around 90pc of all raw materials used to manufacture garments comes from China and disruptions to supply has led to harsh consequences. Last week, 13 Myanmar garment factories, including three being built, closed down their operations.

The next batch of raw materials from China is expected to arrive in late April, but factories may not have enough buyers once the goods are complete if demand does not recover by then, Daw Khine Khine Nwe said.

“Some factories are saying orders from the EU have yet to be confirmed. Another factory could have a third of its orders cancelled. It is getting difficult for factories to predict demand over the next few months,” she said. – Translated

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Source : Myanmar Times

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