Yarn prices have risen in Bangladesh as Coronavirus fear has triggered panic buying. Yarn prices had been showing an upward trend since last October due to higher demand from garment manufacturers. Prices of the widely-consumed 30-carded yarn have risen 11 per cent from a month ago. The industry fears losing competitiveness in international markets if yarn prices go up further since buyers will hesitate giving higher prices for garment products.

The supply chain of fabrics and other raw materials has been affected badly due to the outbreak. Bangladesh apparel makers source 46 per cent of their raw materials from China. Overall imports from China plummeted 21 per cent in January compared to last year, and plunged further to 37 per cent in the first week of February. The disaster assistance fund may be extended to factories/exporters to support unforeseen costs such as air freight, sourcing of raw materials and accessories from alternate and more expensive options to complete the orders and cost of financing for the extended period. Since goods from Chinese suppliers would be delayed, policy directives may be issued to the scheduled banks to amend the respective clauses in the back-to-back letters of credit to make the payments to suppliers conditional and justified.