55% knitwear factories see export orders decline amid gas, power crises: Survey

Around 55%, of knitwear factories have experienced cancellations or reductions in export orders due to the ongoing gas and electricity crises, according to a survey conducted by the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA).

The report, released on Tuesday, stated that 87% of the country's knitwear garment exporters failed to make shipments on time due to the gas crisis that began on 20 July, followed by an electricity crisis.

As a result, nearly two out of every three suppliers were forced to offer discounts to foreign buyers.

BKMEA told the media that the report was prepared based on information collected from 20% of its member companies.

The report further highlighted that 89% of factory owners believed they were at risk of losing the confidence of foreign buyers. More than three-quarters of the factory owners also reported that their production had been partially suspended.

BKMEA says it has 800 active members. A 20% response rate means that approximately 160 respondents participated in the survey.

Among the respondents, 75% said they had been affected by the gas crisis, while 90% reported being affected by the electricity crisis.

The survey found that gas pressure during the period under review was 78% lower than normal.

According to the survey, around 92% of the factories had to incur additional costs for alternative fuel due to the gas and electricity shortages. In addition, approximately 92% of the factories experienced losses in working hours due to disruptions caused by the energy crisis.

Meanwhile, six out of every 10 factory owners said the problems had increased the risk of loan defaults. Another 7% of factory owners said their factories had been completely shut down due to the ongoing difficulties.