Eid economy to suffer badly

Country's businessmen, who were expecting sales bonanzas during this Ramadan ahead of the upcoming Eid-ul-Fitr - the main business season in a year, are still at disarray on whether they would be able to make their estimated transactions in face of ongoing lockdown due to surge in Covid pandemic.

Besides, leading economists fear the Eid economy might shrink as it is not clear whether people will shop despite the lockdown and rise in Covid infections and deaths. If the current situation persists, traders will suffer to great extent.

Pahela Baishakh and Eid-ul-Fitr are the two main seasons in the country’s trade and commerce. With the Covid-19 pandemic wrecking havoc across the country, Baishakh has already gone without much business. Likewise, there is uncertainty over business prospects ahead of Eid-ul-Fitr. The same was the case last year. Under these circumstances, traders across various sectors are in extreme distress.

Eid wholesale buying and selling yet to start as the country is under a strict lockdown owing to the surge in coronavirus infections and deaths. Traders say, the work around Eid began three months ago where they have invested. The bulk of the annual profit, they usually make, comes from the Eid trade.

Eid wholesale market started immediately after the Shab-e-Barat. Retailers started business from the beginning of Ramadan. Traders took preparations for Eid business by investing since January, when the Covid situation was a lot better compared to now. Many have also made additional investments. 

When the time for wholesale began, the hindrance of total lockdown came, when the transport was ordered to remain suspended. As a result, traders at the district level have not yet been able to take goods from the wholesale market in Dhaka.

Though there is no specific information about Eid trade and commerce, a survey by the FBCCI shows, the Eid-ul-Fitr has added an additional Tk 1 lakh 87 thousand crore to the economy.

However, everyone involved in the business thinks that this size has already increased several times.

According to the Shop Owners Association, they have 22 lakh registered shops across the country. These shops usually sell products worth a total of one thousand crore taka daily. And the sales before Eid increase almost five times. In addition, online sales and tailoring shops also make good business.

Indigenous clothing wholesalers say the wholesale market is crowded in three phases – once during the week following Shab-e-Barat, then during the second week of Ramadan and after the 20th Ramadan. Within 10 days, the wholesale market is usually almost completely empty. The crowds start in the retail markets and markets.

This time due to the lockdown, the wholesale traders are in trouble with the goods full of warehouses. These goods have become their burden. One more week off means the sales opportunity is halved.

Economists say that the whole economy is typically boosted by the economic activities as huge sum of money is exchanged in various sectors around Eid. However, there are already doubts about this year’s Eid trade. 

Former caretaker government adviser and economist AB Mirza Azizul Islam said that the size of Eid economy cannot be accurately calculated. However, its size is huge. It is growing day by day. Apart from new clothes, people also spend on other consumer goods on Eid. There is also a cost to travel to and from the villages ahead Eid. But people are suffering financially due to the lockdown. Income is declining. 

The traders are demanding to open the shops immediately. In a press conference on Sunday, Bangladesh Shop Owners’ Association and New Market Owners’ Association and Mahanagar (North and South) Shop Owners’ Association demanded to open markets, shops and small businesses from April 22 in compliance with all the hygiene rules required to hold Eid trade.

Helal Uddin, president of the Bangladesh Shop Owners’ Association said, small traders in the country have been in extreme business downfall and financial uncertainty since March last year. Traders of domestic products have made huge investment in the current season. Aimed at making profit during the Eid-ul-Fitr season, many have bought products by borrowing money. 

Economists said, Eid provide opportunities for businesses. Ahsan H. Mansoor, executive director and economist at the Policy Research Institute (PRI), said the country’s businessmen are mainly preparing for Eid. But they will suffer a lot in the three-week lockdown. 

“Traders are still recovering from the loss incurred last year under a similar pandemic situation,” he said.

“So if the lockdown goes through the middle of Ramadan or two-thirds, afterwards it should be relaxed a bit and traders should be given a chance to catch the Eid season. However, no concessions can be made given the grim situation of the pandemic. Given the situation, the government may consider a lockdown after Eid once the Eid business season is over,” added Mansoor.

Wholesale cloth market in Islampur

The largest suppliers of clothes and fabric are the cloth market of Islampur in Old Dhaka. From there, local clothes are supplied to different markets of Dhaka and other divisional and district markets. There are about 500 clothing stores. Thousands of crore of taka are traded in these shops on the occasion of Ramadan and Eid.

The market is always bustling for a month and a half before Eid-ul-Fitr. This market is usually so busy around the Eid season that people can hardly walk on the streets of Islampur. Wholesalers from different parts of the country buy clothes keeping in mind the preferences of the buyers. 

The textile traders here had hoped that the stagnation in business, which had lasted for almost a year, would intensify around Ramadan and Eid. But due to the current lockdown their store will be closed for about a month, raising concerns.

Haji Faisal, owner of Style Fashion, a wholesaler in Islampur, said, "What more can I say. Last time, the business was bad. The situation is now bad to worse. Warehouses are full with goods. Usually, by this time, two-thirds would have been sold. But still nothing has been sold this time. The lockdown will last eight more days. I don’t know what I will do.”

“Even if I cannot sell clothes, I will have to pay bank loans, tailors' costs, raw material costs, godown rent and employee wages. After that only I can calculate profit. Even if I don’t make any sale, I will have to pay everything. But I don’t know what to do,” he said in despair. 

While Islampur is the top wholesale market in the capital, the biggest retail market is the New Market and adjacent Chandnichak, Gauchia and Chandrima market. Traders in these markets also protested for the store to open at the beginning of the lockdown. Retailers want the government to open the market quickly.

Dewan Aminul Islam Shahin, president of the New Market Shop Owners’ Association, said shopkeepers across the country were observing a 100 per cent lockdown. Many services are available under limited facilities. If the traders can keep the shops open, they can put food before their families and pay their employees their salaries.

“Traders wait for this season all year round," he said adding, “At this time – starting from Shab-e-Barat to Eid, trade is at all time high in a given year. Closing the shops now mean sitting on the roads.”

Azhar Ali, a trader in New Market, said, “We have our backs to the wall. We want to live. Owners and employees will die of hunger if markets and shops are not opened. I have been waiting for Ramadan for eight or nine months of the year. So the shops have to be opened in compliance with the hygiene rules.”

Around Eid, various local brands have designed eye-catching clothes and also brought modern tasteful clothes to the market. Boutiques and fashion houses of the country have also made additional products with loans from banks to take advantage of the Eid market.

Shaheen Chowdhury, the proprietor of the fashion house Baluchar, said tha the big buyers of Baluchar’s clothes are the young class. These specially designed clothes are made for Eid. Other times such clothes are not sold that much. Wholesale buyers are also unable to come due to the lockdown. There are no retailers as the showrooms are now closed. 

“Now I am waiting for the lockdown to relax,” he said.

Economists say Eid shopping is not just about clothes and shoes, but also about trades in every sector, including consumer goods, electronic goods, travel, furniture, cars and housing. But so far no sector has been able to do business as usual.