·      Over 400 RMG Factories Closed in Three Years

More than 400 garment factories in Bangladesh shut down between July 2023 and June 2026, Commerce Minister Khandakar Abdul Muktadir told parliament on 3 September.

Of the closures, 282 were members of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and 120 belonged to the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). The government is still preparing a complete list of the factories that have closed.

The minister attributed the closures to a combination of global and domestic pressures. These included the Covid-19 pandemic, international conflicts, the global economic downturn and domestic political instability. Rising energy costs, lending rates and production expenses also put pressure on factories. Small and medium-sized factories faced additional difficulties as foreign buyers showed less interest in placing orders with them. He said buyers are often reluctant to work with smaller factories because monitoring them is more difficult.

Recent BGMEA data also showed that gas shortages have prevented many factories from operating at full capacity. Higher energy costs, lending rates and wages have further increased production costs. The government is continuing various cash incentives and trade facilities to support exports. These include alternative cash incentives for domestic textile manufacturers and additional support for small and medium-sized knit, woven and sweater producers.

Bangladesh also faces challenges from the loss of preferential market access following LDC graduation. The minister estimated that around $17.5 billion in exports could be affected. The government is pursuing trade agreements and new export markets while planning to participate in 50 international trade fairs in FY2026-27.

Source: The Business Standard

• Energy Crisis Cuts Orders at 55% of Knitwear Factories

Around 55% of knitwear factories have seen international retailers and brands cancel or reduce work orders due to the ongoing energy crisis, according to a Bangladesh Knitwear Manufacturers and Exporters Association survey.

The survey covered 20% of BKMEA member factories in Narayanganj, Gazipur, Chattogram, Dhaka and other areas between August 21 and September 14. Nearly 78% reported partial production shutdowns, while 87% faced shipment delays. Around 60% had to offer buyers discounts.

Electricity shortages affected about 90% of factories, while nearly 75% faced gas shortages. Among factories providing data, gas supply had fallen around 78% from normal requirements. Average daily power outages had also increased by around 200%. The disruptions reduced production significantly. Knitting output fell 37-38%, dyeing production 51% and garment sewing production 40%.

Around 92% of factories incurred additional costs for alternative fuels, while a similar proportion reported wasted labour and working hours. Nearly 89% faced the risk of losing buyers’ confidence and about 59% faced the risk of defaulting on bank loans. Around 7% had completely stopped production.

BKMEA Executive President Fazlee Shamim Ehsan said the garment sector is going through a difficult period and called for government policy support to help factories overcome the challenges.

Source: The Daily Star

• RMG Exports to US Jump 26% in August

Bangladesh’s RMG exports to the US rose 25.65% year-on-year in August, reversing part of the decline recorded during the first half of 2026.

The country exported more than $817 million worth of garments to the US during the month, according to Bangladesh Export Promotion Bureau data. In July and August combined, exports reached $1.61 billion, up 11.42% from the same period a year earlier.

The US remains Bangladesh’s largest single-country export market. In FY2025-26, Bangladesh exported more than $7.74 billion worth of RMG to the US. However, data from the US Department of Commerce’s Office of Textiles and Apparel showed a 5.75% decline in Bangladesh’s RMG exports to the market during the first half of 2026.

Exporters remain cautious about the outlook and expected that if the current export pace continues, Bangladesh’s RMG shipments to the US could reach nearly $9 billion in FY2026-27.

Source: The Business Standard

• Bangladesh Trails Vietnam in EU Garment Export Prices

Bangladesh’s garment export prices in the European Union are less than half of Vietnam’s, mainly due to Bangladesh’s limited share of high-value garment items in its export basket.

Among major suppliers to the EU, Bangladesh has the second-lowest export prices after Pakistan. According to Eurostat, the unit price of Bangladeshi garments fell 8.47% year-on-year to €13.80 per kg from €15.07.

Vietnam’s average price rose to €29 per kg in the first six months of this year from €25.95 in the same period last year. China’s garment export prices fell 2.18%.

Mohammad Hatem, president of the BKMEA, said Vietnam exports more high-value garments to the EU while Bangladesh remains focused on lower-end products. He also blamed unhealthy price competition among local exporters for lower prices offered by international retailers and brands. “If a T-shirt is sold at $2 from Bangladesh, the price of the same T-shirt from Vietnam is over $4,” he said.

Cambodia’s garment export price rose 7.86% to €18.67, while Turkey’s increased 1.53% to €28.31. India recorded a 1.76% fall, while Pakistan saw the highest decline at 14.74% to €10.77.

The EU’s average garment import price fell 1.93% to €19.84 per kg in the first six months of this year. Total apparel imports declined 5.10% by value to €54.38 billion and 3.23% by volume to 2,688.66 million kg.

Bangladesh’s exports fell further than the overall market, declining 13.65% to €10.37 billion in value and 5.66% in volume to 751.91 million kg during January-July. As a result, Bangladesh lost market share.

Source: The Daily Star

·      BGMEA, BKMEA Oppose Withdrawal of Yarn Bond Facility

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) have urged the government to reverse the National Board of Revenue’s (NBR) decision to withdraw bonded warehouse facilities for imports of 10–30 count cotton yarn.

Under an NBR order issued on 7 September, exporters with bonded warehouse licences must now import the yarn against an unconditional and continuous bank guarantee covering applicable duties and taxes. The guarantee will be released after verification of export requirements.

In a joint letter to the commerce minister, BGMEA President Mahmud Hasan Khan and BKMEA President Mohammad Hatem said the withdrawal had not been discussed at an inter-ministerial committee meeting held earlier.

The associations also objected to Clause 5(a), which calls for withdrawing bond facilities, and Clause 5(b), which requires local spinning mills to supply at least 50% of yarn for export-oriented production. They said the measures could create serious difficulties for the export-oriented RMG sector.

BGMEA and BKMEA warned that removing the long-standing bond facility could raise production costs, send a negative signal to international buyers and weaken Bangladesh’s global competitiveness.

They also said local spinning mills are operating at less than 50% capacity amid the energy crisis and cannot currently meet the entire yarn demand of export-oriented garment producers.

Source: The Business Standard

• BGMEA Sets Up Japan Desk to Expand Share of Japan’s $22b Apparel Market

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has launched a dedicated Japan Desk to help local apparel exporters expand their presence in Japan’s $22 billion apparel market.

Around 100 garment factories have already been selected to work with Japanese buyers. Representatives of major Japanese companies, including Teijin Frontier, Marubeni, ITOCHU and Toyota Tsusho, attended the programme.

Bangladesh currently exports just over $1 billion in apparel to Japan. BGMEA aims to raise this to $3 billion by 2030. The Japan Desk will support buyer-supplier matchmaking, dispute resolution and repeat business.

Japanese Ambassador Saida Shinichi urged Bangladeshi manufacturers to diversify into higher-value products, including man-made and chemical fibres.

Source: The Business Standard

·      Stricter Yarn Controls Could Strengthen Domestic Spinning

Bangladesh’s textile and spinning industries could restore jobs lost over the past three years and create new employment opportunities, potentially securing nearly 1.5 million jobs following tighter controls on yarn imports, officials say.

Restrictions on imports of 10-count to 30-count cotton yarn could strengthen the primary textile and RMG supply chain while saving around $1.6 billion annually in import costs, according to commerce ministry and tariff commission officials. The commerce ministry has advised the National Board of Revenue (NBR) to curb these imports following a report by the Bangladesh Trade and Tariff Commission (BTTC).

Yarn imports under HS headings 5205, 5206 and 5207 nearly doubled from 350.8 million kg in FY23 to 697.1 million kg in FY25, with the latter valued at Tk267 billion. In FY26, total yarn import costs rose to around Tk300 billion, with about 65% consisting of yarn in the 10 to 30 count range.

Textile millers estimate that replacing a major share of these imports with locally produced yarn could reduce the annual import bill by around Tk200 billion. Recent changes have also withdrawn traditional duty-free bonded warehouse facilities for these yarn counts, replacing them with bank guarantees, verified export proofs and stricter accountability.

Md Badsha Mia, founder of Badsha Group of Industries, said the tariff commission recommended keeping 10 to 30 count yarn outside the bond facility to protect domestic spinning from unfair competition. He stressed the need to balance raw material imports with the viability of local production. Chowdhury Mohammad Hanif added that stronger oversight could protect local investments worth more than $32 billion, ensure proper revenue collection and strengthen domestic value addition as Bangladesh faces post-LDC trade challenges.

Source: The Financial Express

• Cooling Investments Offer a Four-Year Payback for Garment Factories

Investing in cooling systems to reduce heat stress for garment factory workers can make financial sense for manufacturers and the brands they supply, according to a study by Cornell University’s Global Labor Institute.

The study found that cooling measures such as reflective paint, roof insulation and airflow ventilation are commercially viable in Bangladesh and can pay back within four years. Researchers based their findings on temperature readings collected over six months at eight factories in Dhaka.

Temperatures inside factories often exceed those outdoors, with workers in ironing and finishing sections facing the highest heat exposure. Heat stress reduced annual revenue by an average of 4.1% at the eight factories, creating financial risks for both manufacturers and global brands.

The findings follow research published three years earlier that estimated heat and flooding could erase $65 billion in apparel export earnings from Bangladesh, Cambodia, Pakistan and Vietnam by 2030.

Source: The Business Standard