Energy Crisis Squeezes Bangladesh Apparel Margins as Christmas Airlift Looms

Refayet Ullah Mirdha, Dhaka — Local apparel exporters are fearing expensive airfreight and discounts from international clothing retailers and brands because of delays in production and timely shipment of goods due to the current energy crisis — with Christmas shipments now at risk of requiring costly airlift operations.

The suppliers are now scrambling to complete production and ship goods on time, as July to the first week of December is the peak period for Christmas shipments. "Buyers have been asking for timely shipment as many are lagging behind in making the Christmas deliveries on time amid the energy crisis," said Anwar-Ul-Alam Chowdhury (Parvez), Chairman and Managing Director of Evince Group, whose clients include Levi's, Armani, Zara and H&M.

⚡ Gas Crisis Impact on Production

Since the third week of July 2026, the country's apparel and textile industry has been facing worsening gas and power supplies following the disruption at a floating LNG terminal:

• ⚡ Gas pressure at many factories below level needed for smooth operations
• ⚡ Textile, dyeing and finishing units particularly affected
• ⚡ Production cuts: 30-40% reported by early August in major industrial belts
• ⚡ Gas-fired power generation affected, worsening electricity supply
• ⚡ Local textile mills struggling to supply fabrics on time

🚢 Sea vs Air Freight Cost Comparison

From November, sea freight will no longer be a viable option for some delayed Christmas deliveries. Local manufacturers will have to opt for expensive airfreight or offer discounts to compensate for delays:

• 🚢 Sea freight (Chattogram to Europe/US): 30-35 cents per kg (or less)
• ✈️ Air cargo to Europe: $3.50-$4.00 per kg
• ✈️ Air cargo to US: $5.00-$5.30 per kg
• ✈️ Peak season (Nov-Dec) air to Europe: $6.00 per kg
• ✈️ Peak season (Nov-Dec) air to US: $7.00-$7.50 per kg

Source: Kabir Ahmed, former president of the Bangladesh Freight Forwarders Association

"The airfreight will be a major challenge for the delay in production. And of course, air shipment is very expensive making profit through almost impossible," said Parvez of Evince Group.

💰 Diesel Generator Coping Strategy

Amid the prolonged energy crunch, some manufacturers have resorted to costly diesel-fired generators to keep their production lines running:

• 💰 Sparrow Group: continuing production with diesel generators (Shovon Islam, MD)
• 💰 Ananta Group: using diesel generators to run factories (Sharif Zahir, Chairman)
• 💰 30-35% production loss being covered by diesel generators (per BGMEA president)
• 💰 Working hours extended by 3-4 hours using diesel generators
• 💰 Small and medium units facing more difficulties than large factories

👥 Industry Leader Reactions

Mohammad Hatem, President of BKMEA, said buyers are sending messages warning of discounts and expensive air shipments. "The buyers are also not placing full volume of work orders for the next seasons as they are also observing the situation," Hatem said.

Mahmud Hasan Khan, President of BGMEA, said local garment exporters have been covering 30-35 percent production losses by using diesel-run generators. "Until now, the local exporters are maintaining the production and timely shipment of goods with the diesel run generators. In near future, it is expected that the energy crisis will end," he said.

Two big garment exporters, speaking on condition of anonymity, said they are struggling to ship goods on time because of the scale of their operations. They feared having to airlift goods from Dhaka to Europe and the US at much higher costs to meet deadlines for buyers.

📊 Strategic Context: Christmas Season and Energy Crisis

• 🎅 Christmas peak period: July to first week of December
• ⚡ Gas crisis since: third week of July 2026
• ⚡ 660 textile mills affected by gas shortage (ID 458)
• 🚢 LNG supply: Qatar force majeure extended through November (ID 527)
• 💰 FY26 petroleum import bill: $10.63 billion (up 107% YoY)
• 💰 Brent crude above $90 per barrel (ID 490)
• 📊 400+ RMG factories closed in 3 years (ID 513)
• 📊 FY26 RMG net earnings: only 0.96% growth to $38.97 billion

🌏 Strategic Implications

• ⚠️ Christmas airlift risk: air freight 10-20x more expensive than sea
• ⚠️ Profit margin squeeze: diesel generators + potential airfreight = cost escalation
• ⚠️ Buyer confidence erosion: orders for next seasons being reduced
• ⚠️ SME factories vulnerable: cannot afford diesel generators
• ⚠️ Discount pressure: buyers demanding discounts for delays
• ✅ Large factories coping: diesel generators maintaining production
• ✅ Working hours extended: 3-4 extra hours via diesel
• ✅ Timely shipment maintained: so far, with increased costs

The energy crisis squeezing Bangladesh's apparel margins ahead of the Christmas season represents one of the most acute operational challenges for the RMG sector in 2026. The combination of gas supply disruptions (since July), Qatar LNG force majeure (through November), and the approaching November-December Christmas delivery window creates a perfect storm where factories must choose between costly diesel generator operations (30-35% production loss coverage), expensive airfreight (10-20x sea freight cost), or buyer discounts for delayed shipments. The outcome of this crisis will significantly influence Bangladesh's RMG export performance in FY27 and buyer confidence through the LDC graduation transition period beginning November 2026.