Bangladesh’s once-booming home textile industry faces a bleak outlook in the global market. A combination of factors including a persistent gas crisis, volatile currency exchange rates, and soaring production costs is driving many factories out of business.
Home textile exports, which soared to over $1 billion in the fiscal year 2020-21, have been on a downward spiral. The sector saw a sharp decline of 32.47% in exports in 2022-23, and the trend continued into the current fiscal year, with shipments falling by 34.37% between July and January.
The gas crisis, triggered by reduced local production and a decrease in liquefied natural gas imports, has dealt a severe blow to suppliers.
The depreciation of the Bangladeshi taka against the US dollar has further exacerbated the situation. As a result, the number of active home textile mills has dwindled from 38 to just eight in recent years, signaling a significant contraction in the sector.
The recent hike in gas prices by the government has added to the woes of millers, leading to an immediate increase in production costs.
This, coupled with uncertainty regarding energy prices, has dampened investor confidence and deterred new orders. Facing stiff competition from Pakistan, whose currency depreciation has made its exports more attractive, Bangladeshi textile manufacturers are struggling to stay afloat. The reliance on external markets for raw materials adds to the challenges faced by the industry.
In addition to domestic challenges, external factors such as geopolitical tensions and global inflation have also impacted export markets, leading to reduced demand and shrinking profit margins for Bangladeshi exporters.