Bangladesh Garment Factories Cut Output as Energy Crisis Spurs Fuel Price Hike

Bangladesh raised fuel prices by up to 17.4% on September 21, 2026, as Middle East conflict-driven energy shortages disrupt the country's garment industry, the world's second-largest apparel exporter after China. A survey of 134 knitwear factories found 55% have seen buyers cancel or reduce orders since late August due to gas and power shortages, while 78% have partially halted production. The sector accounts for over 80% of Bangladesh's export earnings, employs roughly 4 million workers and contributes about 10% of GDP. Most factories lack reliable power alternatives. 4A Yarn Dyeing, a supplier to Walmart, Gap and Next, meets about 40% of its electricity needs through solar and generates the rest via its own gas and diesel units, insulating it from grid failures. Co-owner Abdullah Hil Nakib said costlier diesel has raised production costs 2% to 3%, adding up to 5 million taka ($40,950) to monthly fuel bills. Some manufacturers have resorted to air freight or buyer discounts to meet deadlines, eroding thin margins.