Dhaka, Bangladesh (BBN)– Bangladesh’s overall imports grew by 9.17 per cent or US$2.07 billion in the first-half (H1) of the current fiscal year (FY) mainly due to higher import of food grains and fuel oils, officials said.
The actual import in terms of settlement of letters of credit (LCs) rose to $24.66 billion during the July-December period of FY 2017-18 from $22.59 billion in the same period of the previous fiscal, according to the central bank latest statistics.
Talking to the BBN, a senior official of the Bangladesh Bank (BB) said higher imports of food-grains along with petroleum products have pushed up the country’s overall imports during the period under review.
He also said higher orders indicate that the overall import would increase in the coming months.
LC opening–generally known as import order–increased by nearly 75 per cent or $17.21 billion to $ 40.23 billion in the first six months of FY 18 from $23.02 billion a year before, the BB data showed.
Bangladesh’s overall import orders recorded an all-time high at $16.10 billion in November 2017 when a big LC for imports was opened for setting up Rooppur Nuclear Power Plant (NPP).
Bangladesh Atomic Energy Commission (BAEC) opened the LC worth $ 11.38 billion through the state-owned Sonali Bank Limited to import different items, including capital machinery, for the nuclear plant.
Senior bankers, however, said the overall import may fall slightly in the coming months as most banks are now maintaining a ‘go-slow’ policy in lending because the limit of advance-deposit ratio (ADR) has already been revised downward by the central bank.
The ADR of all banks is re-fixed at 83.50 per cent for conventional banks and at 89 per cent for shariah-based Islamic banks. The existing ratios are 85 and 90 respectively.
The banks must make adjustment gradually by June 30.
“We’re now following a ‘go-slow’ policy for opening fresh LCs for the slashing of the ADR by most of the banks in line with BB directive,” M A Halim Chowdhury, managing director and chief executive officer of the Pubali Bank Limited, explained.
On the other hand, imports of consumer goods along with food-grains increased significantly in the H1 of FY 18 to meet a growing demand for the items on the local market, according to another BB official.
Import of consumer goods increased more than 60 per cent to $3.83 billion during the H1 of this fiscal from $2.39 billion in the same period of the FY 17, the BB data showed.
On the other hand, rice import rose to $869.20 million during the period from only $8.24 million in the same period of the FY 17 while wheat import cost $663.08 million from $573.29 million.
However, food-grain imports covering rice and wheat increased by more than 163 per cent to $1.53 billion from $581.53 million in the same period of the previous fiscal.
“The rice-import pressure may ease slightly in the coming months while upward trend in fuel oil import may continue due to seasonal effect,” the central banker hinted.
He also said demand for the fuel oils may rise in the months ahead to meet extra pressure on the fuels for irrigation purposes across the country during the dry-season farming spree.
The import of petroleum products rose by 20.21 per cent to $1.39 billion during the July-December period of FY 18 from $1.16 billion in the same period of the previous fiscal.
On the other hand, import of capital machinery or industrial equipment used for production dropped by 11.66 per cent to $2.53 billion in the H1 of this fiscal year against $2.88 billion of the same period of FY 17.
Meanwhile, industrial raw-material imports grew by 7.95 per cent to $8.68 billion from $8.04 billion in the same period of the previous fiscal.
During the period, import of machinery for miscellaneous industries witnessed a 5.29 per cent growth to $2.47 billion from $2.35 billion in the same period of the previous fiscal.
On the other hand, import of intermediate goods, like coal, hard coke, clinker and scrap vessels, increased by 4.61 per cent to $1.91 billion in the first six months of this fiscal from $1.83 billion in the same period of the previous fiscal.