Bangladesh’s textile and spinning mills are facing severe production issues due to an ongoing gas crisis, leading to a 13% increase in yarn imports as fabric and garment manufacturers seek alternatives to meet demand. Bangladesh Bank data indicates that the clothing industry imported yarn worth $2.64 billion between July and April of the recent fiscal year, compared to $2.34 billion during the same period in FY ’23.
Apparel exporters highlight the double challenge of the gas crisis and a dollar shortage, forcing local mills to increase imports. The reduction of government incentives from 4% to 1.5% has further complicated the situation, potentially lowering the value added by the RMG sector.
Gas crisis has been critical, with textile mills requiring 8-10 PSI of gas pressure to operate efficiently but experiencing drops to 1-2 PSI, severely affecting output. Around 70-80% of mills are running at roughly 40% capacity. The Bangladesh Textile Mills Association (BTMA) reported significant mechanical damage and operational halts due to the gas pressure issues.
Despite an increase in gas prices from Taka 16 to Taka 31.5 per cubic metre by January 2023 and government promises of an uninterrupted supply, the anticipated gas supply has not materialized. BTMA has called for a return to previous gas prices until the crisis is resolved.
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