Dhaka, Bangladesh (BBN)– Bangladesh’s overall imports fell by 7.28 per cent or US$294.53 million in August this year despite higher rice purchase from overseas markets.
The settlement of letters of credit (LCs), generally known as actual import, came down to $3.75 billion in August 2017 from $4.05 billion a month before. It was $3.43 billion in August 2016.
However, opening of fresh LCs, generally known as import orders, increased by 8.21 per cent or $386.67 million to $5.10 billion this past August from $4.71 billion in July 2017. It was $3.81 billion in August last year.
“The country’s overall imports decreased slightly in the month of August last mainly due to lower import of capital machinery and back-to-back imports for readymade garment (RMG) products,” a senior official of the Bangladesh Bank (BB), the country’s central bank, explained.
He also said the rising trend in food grains practically rice imports may continue in the coming months to keep the prices of main staple stable in the local markets through boosting its supply.
Both the government and the central bank have already taken different measures to encourage the importers to import more rice to meet the growing demand for the essential item amid a slowing local supply.
Earlier on July 20 last, the BB relaxed its foreign-exchange-transaction rules for opening LCs against rice import to ensure sufficient supply of the staple food on the domestic market.
Under the relaxed rules, the banks have been allowed till December 31, 2017 to open LCs against deferred or usance bills or under buyer’s credit up to a 90-day term.
The central bank had also allowed the banks to open LCs for importing rice with zero-margin on the basis of bank-client relationship.
Besides, the National Board of Revenue (NBR) brought import duty on rice down further to 2.0 per cent on August 17 from the previously pared-down rate of 10 per cent.
Earlier on June 20 this year, the government slashed the import duty on rice to 10 per cent from 28 per cent in the wake of price spirals.
The government as well as the central bank had taken the latest moves against the backdrop of damage to the output of the single-biggest crop, Boro, in May due to flashfloods particularly in haor areas (marshlands) of Bangladesh.
The rice import increased by 21.24 per cent or $14.79 million to $84.42 million during the period under review from $69.63 million a month ago. It was only $1.26 million in August 2016.
In August last, rice imports through private sector stood at $84.27 million while the staple was imported worth $0.16 million by the public sector, the BB data showed.
However, the back-to-back import of RMG accessories dropped by nearly 31 per cent or $286.04 million to $637.66 million in the month of August from $923.70 million in July last despite higher export earnings from the apparel products.
Earnings from readymade garment (RMG) covering both knitwear and woven increased by more than 14 per cent to $5.52 billion during the July-August period of the ongoing fiscal year (FY) 2017-18 from $4.84 billion in the same period of the last fiscal.
Bangladesh earned $2.87 billion from knitwear export during the period under review, which marked an increase of 16.02 per cent compared to that of $2.47 billion in the same period a year ago.
The earning from woven garments in the first two months of FY 18 grew by 11.99 per cent to $2.65 billion, from $2.37 billion in the same period of the last fiscal, according to the official figures.
On the other hand, import of capital machinery — industrial equipment used for production – dropped by nearly 37 per cent or $127.75 million to $220.18 million during the period under review as against $347.93 million in July 2017.
The central banker, however, said he imports of capital machinery may rebound in the coming months following implementation of different infrastructures alongside mega- projects in Bangladesh.