Recently, a heat wave has swept across Southeast Asia, with high temperatures breaking historical records in many countries. Sustained high temperatures pose challenges to the power supply capabilities of various countries. Relevant areas in Vietnam, Bangladesh, India and other countries have experienced rolling blackouts and power rationing, causing a large number of factories to suspend production. With exports from countries such as Vietnam already declining significantly, power outages may bring new challenges to the exports of these countries.
High temperatures trigger power outages in Vietnam, Bangladesh and other countries
Vietnam: High temperatures triggered rolling power outages in industrial parks, affecting a large number of foreign-owned factories
According to the Financial Associated Press, due to factors such as the surge in residential electricity demand caused by high temperature and heat waves and the decline in hydropower output, widespread power outages occurred in many industrial parks in southern Vietnam.
According to the announcement of the Southern Vietnam Electricity Company (EVNNPC), many regions in the country, including Bac Giang and Bac Ninh provinces, are facing rolling blackouts, and some industrial parks will also be affected. These areas are where Foxconn, Samsung, Canon and other foreign investors intensively set up factories. For the manufacturing industry, power outages basically mean the suspension of production.
According to media reports, Canon’s factory in Bac Ninh Province has been without power since 8 a.m. on Monday, and will not be able to wait for power supply until at least 5 a.m. on Tuesday. Other multinational manufacturing giants have not yet responded to the media. On the official website of the Southern Electric Power Group, you can also check the situation of rotating power outages in different regions this week. A large number of areas will face power outages that range from a few hours to a whole day.
Southern Power Group said that considering the power pressure caused by the persistent high temperature in early June, further power shortages are inevitable. In addition, according to the official news website of the Bac Giang provincial government, factories have been asked to postpone some production until after 10 p.m., and will further save electricity by turning off or reducing the brightness of street lights by 50%.
What’s most dissatisfying to industrial companies is that power outages in Vietnam don’t always go according to schedule. The European Chamber of Commerce in Vietnam said on Monday that it had written to Vietnam’s Ministry of Commerce, requesting that “frequent and no-signal power outages” be resolved as soon as possible. In response, the government has asked relevant agencies to increase coal and natural gas production, while also looking for ways to increase electricity supply.
Since the beginning of this year, Vietnam’s export contraction has mainly resulted from the sharp decline in exports of manufacturing products. Smartphones, computers, machinery, textiles and footwear saw larger year-on-year declines. The rolling power outages in Vietnam’s industrial parks have affected the normal production of a large number of foreign-funded factories, which may bring a new blow to Vietnam’s exports.
Bangladesh: High temperatures intensify electricity demand and large-scale power outages may continue for another two weeks
Bangladesh energy department officials said on the evening of June 4 that widespread power outages across the country may continue for another two weeks as rising temperatures push up electricity demand and fuel shortages in power plants.
According to Reuters, Bangladesh has suffered from serious power shortages since April. On the one hand, frequent high-temperature weather has caused a surge in electricity demand; on the other hand, about 75% of Bangladesh’s electricity relies on imported natural gas for power generation, while the price of liquefied natural gas is high. In the second half of 2022, it set a new record. Bangladesh Imports have to be reduced. To make matters worse, due to the impact of Tropical Cyclone Mucha in mid-May, many LNG carriers were postponed, putting further pressure on the national power supply system.
According to Reuters, power shortages threaten the development of Bangladesh’s garment industry, which is one of the most important economic pillars of Bangladesh. Clothing products account for more than 80% of total exports. A reduction in exports will seriously affect the country’s foreign exchange earnings. , thereby weakening its ability to purchase imported fuel.
India: High temperatures hit, facing dual crises in power and agriculture
According to CCTV financial news, coal inventories in many places in India have been running low recently and they are facing the most serious power crisis in recent years.
About 75% of India’s electricity comes from coal. At this stage, at least 108 of India’s 173 coal-fired thermal power plants are running out of coal stocks, leading to power shortages in Maharashtra, Punjab, Jharkhand and other states. In the northwestern Indian state of Rajasthan, factories and rural areas need to cut power for four hours a day to relieve power pressure.
It is worth noting that India is an important food supplier to the world. People who directly or indirectly rely on agriculture as their main source of income account for nearly 60% of India’s 1.4 billion population. Affected by high temperature weather, India’s agricultural product output has declined, and farmers’ income has been affected.
Thailand: High temperatures continue, causing short-term power outages and power rationing in many areas
According to Thai media reports, the temperature in Thailand has been rising in the past eight years and is considered the hottest period in 145 years. This year is the hottest in the past eight years. In May, the body temperature in the capital Bangkok, Chonburi, Phuket and other places once reached 54°C, and the temperature across the country reached 54°C.�The average maximum temperature also rose to 40℃.
Data shows that in April this year, Thailand’s peak electricity consumption reached 31,000 megawatts, posing challenges to local power supply capabilities. Short-term power outages and power restrictions occurred in many areas.
The Thailand Meteorological Administration predicts that Thailand will face a severe drought starting in mid-June this year, and its severity may exceed the 2020 drought. Wissanu, an expert in agricultural economics and climate change at the Thai Agricultural University, said that all sectors of society must be prepared for continued high temperatures and droughts, and must be especially alert to the impact of drought on agriculture.
Sri Lanka: Lack of resources and dry weather, power outages for 10 hours a day
Sri Lanka’s largest state-owned power company, the Ceylon Electricity Authority, said at the end of March that it would implement a nationwide power outage of 10 hours a day from now on.
It is reported that Sri Lanka is in the midst of its most serious economic crisis since independence in 1948. A severe shortage of foreign exchange has made it impossible to purchase imported goods. Sri Lanka relies on coal and oil to generate 60% of its electricity, and both coal and oil need to be imported from abroad. In addition, about 40% of the country’s electricity is hydroelectric, but most reservoirs are in extreme water shortages due to dry weather.
The Sri Lankan government said it was seeking a bailout from the International Monetary Fund.
Philippines: El Niño warning: Drought or even drought may occur in some areas
On May 7, the National Weather Service of the Philippines recorded the highest temperature this year in Isabela Province at 39°C, and the felt temperature in some areas has approached 50°C. The lives of local people have been affected.
The National Weather Service of the Philippines issued an El Niño warning on the 2nd of this month, stating that there is a high probability of El Niño occurring in the Philippines from June to August and will last until the first quarter of 2024. Drought or even drought may occur in some areas of the Philippines.
Exports from many countries may be hit hard again
In addition, the latest import and export data show that exports from Vietnam and other countries are still on a downward trend recently.
According to data released by the National Bureau of Statistics of Vietnam, Vietnam’s exports fell by 5.9% year-on-year in May, the fourth consecutive month of decline; in the first five months of this year, Vietnam’s exports fell by 11.6% year-on-year to US$136.17 billion.
According to preliminary estimates released by the Indian Ministry of Commerce, India’s merchandise exports fell 12.7% year-on-year to US$34.66 billion in April, the lowest point in six months.
Thailand’s exports have declined for the seventh consecutive month. According to official data from the Ministry of Commerce, Thailand’s total exports in April 2023 were US$21.723 billion, a year-on-year decrease of 7.6%, and imports were US$23.195 billion, which brought the current trade deficit in April to US$1.47 billion.
Due to weak external demand, Sri Lanka’s exports fell 12.6% year-on-year to US$849 million in April.
As of March this year, the Philippines’ total export sales were US$6.53 billion, a decrease of 9.1%.
With exports already declining significantly, continued high temperatures and power shortages will add further pressure to the textile exports of these countries…
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