Dhaka, Bangladesh (BBN) – Bangladesh’s overall imports increased significantly in July last as importers moved to build stocks of essential commodities fearing political instability ahead of the next general election, officials said.
The import orders rose by more than 29 percent in July last compared to the corresponding period of the previous year, they added.
Opening letters of credit (LCs) against imports, generally known as import orders, rose to US$ 3.63 billion in July last from $2.81 billion in the same month last year, according to the central bank statistics.
On the other hand, settlement of LCs, generally known as actual imports, increased by over 12 per cent to $ 3.21 billion in July last from $ 2.86 billion in the same period of the last year.
“The overall imports rose in July last following the higher volume of import of essential items including food grains,” a senior official of the Bangladesh Bank (BB) said, adding that the import of food grains, particularly rice and wheat, jumped during the period under review after nearly two years.
The import of rice increased by 786.86 per cent to $12.15 million in July last from $ 1.37 million in the same period of the last year while wheat import rose to $ 130.75 million from $ 64.04 million, the BB data showed.
“Most of the importers of essential items feared the imports might be hampered in the event of any prolonged confrontational politics in the country,” the central banker said.
Besides, most essential items, including refined petroleum product, sugar, raw cotton, back-to-back imports for the readymade garment (RMG) sector and BP sheet, increased in July last compared to the same period of the last year, according to the BB official.
“Opening LCs against imports normally increases in the months of July and August after announcement of the national budget in June each year,” a senior official of a leading private commercial bank said, adding that the settlement of LCs rises in the month of September every year.
“The ongoing political uncertainty has also contributed slightly to the rise in overall imports as precautionary measures were taken in July last,” the private banker said.
The banks were now interested to invest in different sectors including trade financing for utilising their increased supply of foreign exchange, he added.
Talking to the BBN, a leading importer said most of the importers were now trying to take advantage of the declining trend of commodity prices in the global market.
“The importers have come forward to open fresh LCs for import of more essential products to seize the price advantage in the international market,” he said, adding that the import orders of wheat increased recently because of the upward trend of rice prices in the local market.
BBN/SSR/AD-11Sept13-9:13 pm (BST)
