Photo : Messenger
Imports of essential goods for the month of Ramadan have surged amidst an acute dollar crisis. However, it is noteworthy that imports have experienced a decline in dollar terms. According to the Bangladesh Bank, this discrepancy can be attributed to the reduction in the prices of products in the international market.
Imports of daily necessities in the first five months (July to November) of the last financial year amounted to $322 million. In contrast, during the same period of the current financial year, the import value decreased to $255 million, reflecting a decline of 26.27 percent. Correspondingly, in the same period of the last financial year, Letters of Credit (LC) were opened amounting to $332 million. However, in the current financial year, LCs have been opened for $231 million, indicating a significant decrease of 43.72 percent in LC openings.
Analysing the data obtained from imports and LC openings, the central bank noted that the prices of a majority of products have decreased in the international market over the past year. This phenomenon has resulted in an increase in the import of goods, despite a decrease in the value of LCs in terms of dollars. Previously, the rate of LC openings in terms of dollars had increased due to higher commodity prices in the international market.
Meanwhile, Ramadan is scheduled to commence in the middle of March this year. Considering the logistical timeline, it takes approximately one and a half to two months to procure the raw materials required for the production of goods and distribute them in the market. Additionally, the finished products need to be imported into the country at least 15 days to one month before the beginning of the fasting period.
In this regard, Mezbaul Haque, Executive Director and Spokesperson of Bangladesh Bank, told The Daily Messenger, “The Central Bank has now increased the supply of dollars for the import of daily necessities. Banks have also taken necessary steps to open LCs for these products quickly. The Central Bank hopes that the LC openings for import of products in this sector will further increase.”
According to data from the central bank, in comparison to July-November of the last financial year, Letters of Credit (LC) for onions have seen a significant surge, increasing by 112.40 percent, and the actual import has risen by 105.77 percent during the corresponding period of the current fiscal year. Similarly, during the same timeframe, the LC opening for the import of spices has shown notable growth, increasing by 92.82 percent, and the actual imports have experienced an 89.87 percent increase.
In November of the previous year, the price of sugar per kilogram in the international market stood at 40 cents. However, it has since surged to 57 cents, representing a significant increase of 42.5 percent. Consequently, the Letters of Credit (LC) opening for sugar imports saw a notable rise, increasing by 27.76 percent, and the actual import of sugar experienced a substantial growth of 73.93 percent during this period.
Steps have been taken to increase the supply of milk and milk products produced in the country. As a result, the demand for imports has decreased. Still LC opening of import of dairy products increased by 1.29 percent and imports increased by 7.21 percent.
Various types of fruits experience higher demand during fasting, with dates being particularly sought after. LC openings for date imports have seen an increase. Additionally, there has been an overall rise of 29.20 percent in LC openings for fruits. However, actual fruit imports have decreased by 3.77 percent, primarily due to lower LC openings in the earlier period. Anticipating that the new LCs for fruits will begin arriving in the country, it is expected that imports will increase, aligning with the higher LC openings and the growing demand for fruits, especially during periods of fasting.
Despite the high demand for soybean oil during fasting, imports have experienced a decline. This decline can be attributed to a significant decrease in the international market price of soybean oil, which has fallen by 27.91 percent over the past year. In November of the previous year, the price of crude soybean oil was $1,560 per tonne, and it has now decreased to $1,125.
Simultaneously, the price of palm oil has experienced a decline from $997 to $856 per tonne, marking a decrease of 14.14 percent during the discussed period. This reduction in price has led to a decrease in both Letters of Credit (LC) and imports in dollar terms.
Similarly, pulses and chickpeas are in high demand during Ramadan. Their prices have also come down in the international market. Due to this LC of imports decreased by 7.59 percent and imports decreased by 19.93 percent.
Messenger/Fameema
