The year 2024 proved to be one of the most challenging for Bangladesh’s textile industry, with political unrest, natural disasters, and energy crises severely impacting the sector’s performance. Despite these setbacks, the industry showed resilience, laying the groundwork for potential recovery in the coming years.
Political Unrest and Economic Turbulence
Political instability dominated much of 2024, beginning with anti-government protests in mid-year that escalated into widespread unrest. Factory closures during peak production seasons, including Christmas shipments, resulted in an estimated shortfall of ৳ 6,400 crore ($534 million) and a significant drop in exports. The political crisis, coupled with curfews and disruptions in communication, led to a substantial decline in productivity and delivery delays, forcing international buyers to consider diversifying their sourcing strategies to other countries.
Bangladesh Bank forecasted a decline in GDP growth for FY 2024-25, with the targeted 6.8% growth unlikely to be achieved. Inflation peaked at 11.66% in July, though it gradually eased to 9.92% by September. The interim government introduced reforms aimed at stabilizing the economy, including measures to improve governance and boost foreign investment inflows.
LNG Shortage and Production Bottlenecks
A significant LNG shortage further compounded the industry’s woes. Damage to a floating LNG terminal in the Bay of Bengal reduced gas supplies, leaving many textile factories operating at less than 30% capacity. The energy crisis disrupted global supply chains and increased operational costs, while buyers from the US, Germany, and the UK began shifting their sourcing to Vietnam, India, and Sri Lanka.
Export Performance
Bangladesh’s apparel exports started the year strongly, achieving a record $4.97 billion in January. However, subsequent months saw declining revenues, with cumulative garment exports reaching $32.86 billion for the first eight months of FY2024—only a 4.77% increase over the previous fiscal period. Overall, the sector missed its export target of $47.47 billion, falling short by 7.63%.
The USA, Bangladesh’s largest apparel export market, reported a 10.97% decline in imports from the country during the January-June period. Exporters attributed this to long lead times, unreliable energy supplies, and high business costs.
Workers’ Rights and Conditions
Worker conditions worsened in 2024, with Bangladesh ranking among the ten worst countries for workers’ rights, according to the ITUC Global Rights Index. Political unrest, combined with natural disasters, disrupted livelihoods, leading to wage arrears and increased hardships for workers. Labor unions and advocacy groups called for reforms to ensure fair wages, worker safety, and improved employment policies.
Calls for Responsible Sourcing
A coalition of international organizations urged companies sourcing from Bangladesh to uphold ethical practices, emphasizing responsible purchasing and enhanced human rights due diligence. These measures aimed to mitigate the adverse effects of the crisis on workers and ensure the sustainability of supply chains.
Reforms and Circular Textile Policy
A study by GIZ and H&M revealed that Bangladesh loses up to $5 billion annually in potential revenue from recycling textile waste due to the lack of a circular textile policy. The study highlighted the need for formalizing the informal Jhut (textile waste) sector, improving transparency, and incentivizing advanced recycling technologies.
The interim government introduced the National Export Policy 2024-27, aiming to nearly double annual export earnings to $110 billion by FY2027. The policy prioritized developing textile fabrics and spinning sectors, along with fostering circular textile practices.
Industry Events and Prospects
Despite challenges, Bangladesh hosted key industry events in 2024, including the Dhaka International Textile & Garment Machinery Exhibition and the Bangladesh Denim Expo, showcasing innovations and fostering collaborations. The ‘Leathertech’ Bangladesh event highlighted the potential of the country’s leather sector, which anticipates significant growth post-LWG certification.
Outlook for Recovery
While 2024 was marred by crises, the introduction of reforms, increased remittance inflows, and foreign aid offer hope for recovery. Strengthening governance, addressing energy challenges, and implementing circular textile practices will be crucial to regaining the industry’s competitive edge.
The year has been a stark reminder of the vulnerabilities in Bangladesh’s textile sector but also a call to action for resilience and adaptation. With strategic planning and reforms, the industry is looking forward to emerge stronger in the years ahead.
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