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H&M, Levi Strauss face disruptions from renewed lockdown in Bangladesh

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H&M, Levi Strauss face disruptions from renewed lockdown in Bangladesh

The government of Bangladesh from July 1 will require the population to remain at home for seven days except during an emergency, the BBC reported, as part of attempts to tackle a new wave of COVID-19 cases.

While primarily a human tragedy, the renewed spread and resulting lockdown will also have an impact on industrial supply chains as factories will likely have to close and may suffer reduced productivity.

That reverses the trend seen earlier in the pandemic when Bangladeshi apparel manufacturers suffered a wide range of order cancellations from retailers across Europe and the Americas, as discussed in Panjiva's June 2020 research.

Panjiva's data indicates that Bangladeshi exporters of apparel to the U.S. have nonetheless remained more resilient than peers during the pandemic, with shipments in the three months to April 30 down by just 1.6% compared with the same period of 2019. By comparison, exporters from India and Sri Lanka dropped 10.1% and 6.4%, respectively, while total U.S. imports fell 5.3%.

Panjiva's U.S. seaborne import data shows there was a recovery to pre-pandemic levels in May 2021 with growth of 6.2% versus May 2019. While most of the imports of apparel from Bangladesh are handled by freight forwarders for off-brand products, there are signs of a mixed set of strategies from the major brands.

Shipments linked to H & M Hennes & Mauritz AB (publ), for example, increased 13.5% in the three months to May 31 compared with the same period of 2019. Imports associated with Levi Strauss & Co. and PVH Corp., meanwhile, fell 47.8% and 68.7%, respectively, over the same period.

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Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.