July imports rise 37pc

Dhaka,  Tue,  26 September 2017
Published : 23 Aug 2017, 01:08:53
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July imports rise 37pc

Rice imports up by 229pc
Siddique Islam


An 229 per cent rise in rice imports enhanced country's overall import growth by over 37 per cent or US$1.22 billion in July, officials said.

They said the country had to count such higher trade bills at the outset (first month) of the current fiscal year on account of substantial amount of rice import for crop losses caused by flood onslaughts.

Higher back-to-back imports for readymade garment (RMG) products and capital machinery also contributed to the rise in national imports.  

Settlement of letters of credit (LCs), generally known as actual imports, rose to US$4.50 billion in July from $3.27 billion a month before. It was $3.64 billion in July 2016.

The opening of fresh LCs, generally known as import orders, increased by over 26 per cent or $1.05 billion to $5.06 billion in July from more than $ 4.00 billion last June. It was $3.89 billion in July last year.

"The overall imports increased significantly during the period under review mainly due to higher import of rice, back-to-back imports for readymade garment (RMG) products and capital machinery," a senior official of the Bangladesh Bank (BB) told the FE Monday.

The rising trend in import of food-grains, practically rice imports, may continue in the coming months to keep the prices of the staple stable in the local markets through boosting its supply, the central banker explained.

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.

"We're encouraging importers to import rice for ensuring country's food security despite flashfloods," a senior executive of a leading state-owned commercial bank told the FE.

Echoing the BB official's view, he also said the upward trend in rice import may continue until the next Aman harvest.

The overall rice imports in terms of value surged by nearly 229 per cent to $69.63 million in last July against $ 21.17 million in the previous month.

Of the total, rice imports through private sector stood at $39.47 million while the bill was $30.16 million for import through public sector in July, the BB data showed.

However, the back-to-back import of RMG accessories rose by more than 100 per cent to $924.70 million in the month of July from $461.55 million in June last following an increased demand for the largest export-oriented industry.

Export earnings from garments, covering both knitwear and woven apparel, jumped by more than 17 per cent to $2.48 billion in July from $2.12 billion in the same period of last year.

On the other hand, import of capital machinery-industrial equipment used for production-was up by 50.13 per cent to $347.93 million during the period under review as against $231.75 million in June 2017.

siddique.islam@gmail.com
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