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Cyclone Mocha Spares Bangladesh Factories as Energy Crisis Deepens

Cyclone Mocha slammed into the Bangladesh-Myanmar coast on Sunday afternoon, spawning a humanitarian crisis while deepening the region’s energy crisis.

Though the hurricane’s eye made landfall in Myanmar, soaking Rakhine State and unleashing landslides in some areas, the storm affected about half a million Bangladesh nationals of whom 60,000 are displaced, according to humanitarian agencies. 

Preparations made under the Standing Orders on Disaster guidelines largely spared Bangladesh from the worst of what government officials expected.

The port city of Chattogram, which is the official name of Chittagong, was on higher alert. The additional damage has come because of the forced closures of both its floating liquefied natural gas (LNG) terminals which supply across the entire country.

The LNG terminal damage exacerbated an ongoing energy crisis in Bangladesh that began when Russia invaded Ukraine, sending prices up and fueling a gas and electricity shortage that’s affected businesses and citizens alike, according to economists.

“We were spared a catastrophe, and although some areas in Chattogram lost electricity and gas connections for a few hours because of the rainfall, factories have not been damaged,” a BGMEA official told Sourcing journal. 

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Both Dhaka and Chattogram, Bangladesh’s main seaport, are major centers of production for the approximately $40 billion apparel export industry from Bangladesh, the second-largest apparel exporter after China, supplying about 8 percent of global apparel shipments. 

A map of Cyclone Mocha’s path.

Fuel and energy prices surged after Bangladesh’s negotiations with the International Monetary Fund (IMF) produced a $4.7 billion loan January. 

While the first installment already in, Bangladesh’s falling foreign reserves are expected to further impact the energy situation, having decreased to $31.14 billion in March from $32.33 billion a month before. In the next two months these are expected to fall further, to $29.86 billion.

Meanwhile, with the increasing number of industrial units as well as a population facing a severe summer heat wave, load shedding and power shortages were up in April. Industry associations like the Bangladesh Textile Mills Association (BTMA) have made it clear that the natural gas shortage is hurting factories and crimping production, with three-month losses of $1.75 billion resulting from manufacturers running well below capacity. 

Last week, electricity continued to be a challenge in several areas in the Rakhine state in Myanmar, as destruction is still being surveyed in more than 21 townships, including the state capital Sittwe and in Rathedaung. 

Bridges have been washed away, and the airport in Sittwe remains closed. More than 5 million people are estimated to have been in the path of the cyclone across Rakhine and the Northwest, with wide-scale destruction. 

While business faces the impact of the gas and power situation, refugees in the low lying Cox’s Bazaar area in Bangladesh, the biggest refugee camp in the world also continue to make their recovery in the wake of Cyclone Mocha. More than 30,000 people in this area were affected, with damaged or destroyed shelters.

The United States Agency for International Development has stepped in with $450,000 in Cyclone Mocha assistance for Myanmar and Bangladesh.