Bangladesh garment makers cut output as energy shortages hit foreign orders
Since late August, most Bangladeshi knitwear factories have reduced production and lost overseas orders because of gas and electricity shortages, while a firm with its own power generation is managing to stay operational.
A recent poll of 134 Bangladeshi knitwear manufacturers revealed that most factories have had to curtail production since the end of August, and over half reported that overseas buyers either reduced or fully cancelled orders because of gas and electricity shortages. 4A Yarn Dyeing, a supplier to retailers including Walmart, Gap and Next, avoided the worst of the crisis by investing years ago in its own energy sources, combining solar panels with on-site gas and diesel generation.
Co-owner Abdullah Hil Nakib said the firm never relied on a single power source, but higher diesel prices have raised its production costs by two to three percent, amounting to roughly five million taka (about 860,000 crowns) each month. The Bangladeshi government has recently increased fuel prices, citing higher world oil prices and rising transport costs linked to Middle-East tensions, further tightening already thin profit margins.
Exporter Shahidullah Azim noted that some buyers are now ordering far fewer garments, fearing further supply disruptions. Smaller factories lack the capital to adopt similar self-generation or battery storage solutions, leaving them vulnerable to ongoing energy constraints.
Why it matters
The energy crisis threatens Bangladesh's garment sector, which drives most export earnings and employs millions.
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