Bangladesh garment sector hit by cotton shortage as floods intensify protest disruptions

Bangladesh Garment Industry Faces Severe Cotton Shortages Amid Flooding and Unrest

The Bangladesh garment industry, a key player in the global textile market, is currently grappling with a series of crises that are threatening its ability to fulfill international orders. Severe flooding has led to a significant shortage of cotton, worsening delays already caused by recent political unrest. These disruptions are putting immense pressure on the industry, which is crucial to the country's economy and the livelihoods of millions.

Supply Chain Disruptions Due to Flooding

Bangladesh is one of the world’s largest importers of cotton, a vital raw material for its extensive textile and garment industry. However, the country has been hit hard by devastating floods over the past week, which have severely disrupted the transport of cotton from Chattogram port to factories across the country. With key roads and railway lines submerged or damaged, only a small fraction of the usual number of trucks and trains have been able to deliver cotton to manufacturers.

This logistical nightmare comes on top of the recent political unrest that led to widespread factory closures earlier this month. The combined impact of these events has caused a dramatic decline in garment production. According to Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), production has fallen by as much as 50%. “The industry is now under immense pressure to meet deadlines,” Hatem said. “Without a swift resolution, the supply chain could deteriorate even further, jeopardizing our ability to fulfill international orders.”

Economic Consequences and Loss of Market Share

The economic implications of these disruptions are profound. Bangladesh, which was the world’s third-largest clothing exporter in 2023—after China and the European Union—exported $38.4 billion worth of garments last year. However, the current crisis threatens to undermine the country’s hard-earned position in the global market.

Rubana Huq, who manages a garment factory in Dhaka, has already experienced significant financial losses due to the disrupted production. “For a moderate-sized company like ours, which produces 50,000 shirts a day at $5 per shirt, the recent disruptions have resulted in a production loss of $250,000,” said Huq, a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). While some factories have begun to slowly resume operations, Huq estimates that it could take at least six months for the industry to fully recover. During this time, she warns, Bangladeshi manufacturers could lose between 10% to 15% of their business to competitors in other countries.

This potential loss of market share is a growing concern. With the current uncertainty, buyers who have traditionally relied on Bangladesh may begin to look for more stable suppliers. Shahidullah Azim, a director of the BGMEA, noted that many buyers are now taking a cautious approach, potentially delaying new orders until the situation improves. “The longer this uncertainty persists, the more challenging it becomes for us to maintain the momentum we have built,” Azim explained.

The Impact of Monsoon Rains

The ongoing monsoon season is exacerbating the crisis. Heavy rains have led to severe flooding across many parts of Bangladesh, with the Bangladesh Meteorological Department warning that these conditions could continue if the rains persist. Water levels in many areas are receding very slowly, which could prolong the disruption to transport and further delay the delivery of cotton to garment factories.

The floods have also affected the broader supply chain. Some cotton shipments that were initially destined for Bangladesh are now being diverted to other countries, such as India, Pakistan, and Vietnam, which are also major players in the global textile industry. Louis Barbera, a partner and analyst at VLM Commodities in New Jersey, confirmed that Pakistan and Vietnam are already seeking cotton for immediate delivery. Atul Ganatra, president of the Cotton Association of India, noted that new orders shifting from Bangladesh could be absorbed by manufacturers in southern India, further increasing competition.

Energy Shortages and Ongoing Challenges

Even before the floods and political unrest, Bangladesh’s garment industry was facing significant challenges due to persistent power shortages. These energy issues have made it difficult for factories to operate at full capacity, further complicating efforts to meet production deadlines. Fazlee Shamim Ehsan, vice president of the BKMEA, emphasized that energy shortages continue to hamper operations, particularly as the industry struggles to recover from the recent disruptions. “Energy shortages continue to be a major issue,” Ehsan said, highlighting the compounding nature of the current crisis.

The combination of these factors—flood-related disruptions, political instability, and energy shortages—has created a perfect storm for Bangladesh’s garment industry. The global market is becoming increasingly competitive, and the ability of Bangladeshi manufacturers to navigate these challenges will be crucial in determining their future role in the international textile trade.

Prospects for Recovery

The road to recovery for Bangladesh’s garment industry is likely to be long and fraught with challenges. Industry leaders are calling for immediate action to address the most pressing issues, such as restoring transportation links and ensuring a steady supply of cotton to factories. However, there is also a growing recognition that the industry must adopt longer-term strategies to strengthen its resilience against future disruptions.

This might include diversifying supply chains, investing in alternative energy sources, and exploring new markets to reduce dependence on traditional buyers. These measures will be essential to safeguarding the future of the garment industry, which is not only vital to Bangladesh’s economy but also supports millions of workers across the country.

In conclusion, the current crisis in Bangladesh’s garment industry is a severe test of the sector’s resilience. As the country battles through these unprecedented challenges, the industry's ability to recover will play a pivotal role in shaping both the future of Bangladesh’s economy and its standing in the global textile market. The world is watching, and the stakes could not be higher.

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