Bangladrsh's imports further rise on economic pickup

Bangladesh's imports increased further by volume and value both amid gradual economic pickup as well as higher import-payment obligation due to international inflation.

Official count on November imports shows the rise is particularly caused by higher purchase of fuel oils to meet a growing domestic demand amid expanding activity after the pandemic slowdown.

The settlement of letters of credit (LCs), generally known as actual import, in terms of value, rose by 5.16 percent to US$5.54 billion in November 2021 from $5.27 billion in the previous month, according to the central bank's latest statistics.

On the other hand, the opening of LCs, generally known as import orders, increased 7.62 per cent to $6.06 billion in November from $5.63 billion a month before.

"The existing upward trend in import may continue in the coming months following the reopening of business activities across the country," a senior official of the Bangladesh Bank (BB) said on Sunday.

He said higher prices of essential commodities, including petroleum products, on the global market also pushed up the country's import payments in recent months.

Actually, the country's foreign trade, covering import and export, increased significantly in recent months thanks to a gradual pickup in economic activities, both domestic and global, amid reopening after more than one year due to the Covid-19 pandemic.

Echoing the BB official's view, a senior executive of a leading private commercial bank (PCB) said that the existing trend in import-payment obligations may continue in the near future if the rising trend in petroleum products along with other commodities' prices on the global market persists.

Meanwhile, actual imports for fuel oils jumped by nearly 58 per cent or $208.59 million to $568.52 million in November from 359.93 million a month ago, the BB data showed.

A senior official of the state-run Bangladesh Petroleum Corporation (BPC) said import expense for petroleum products increased significantly in November following upturn in both price and quantity.

He also predicts that the existing trend in import-payment obligation for fuel oils may continue until March mainly due to seasonal impact.

The demand for fuels has been increasing in recent months as economies have started reopening gradually around the world, the official explained.

However, import under back-to-back LC settlement of textile products was almost stable at $616.19 million in the month of November against $622.64 million a month before as apparel exporters purchased their textiles products earlier in line with buyers' orders to avert price volatility on the global market.

"Imports under back-to-back LC may increase from January 2022 while apparel manufacturers are expected to start to get fresh purchase orders in the global market," Sayeed Ahmad Chowdhury, director, operations, of Square Denims, said while explaining latest market situation.

He also predicts that the existing uptrend in export earnings will continue through this month despite falling trend in the textile products.

Import of capital machinery or industrial equipment used for production was up by more than 4.0 per cent to $361.59 million in November as against $346.40 million a month ago.

Higher capital-machinery imports were needed for apparel and clothing, pharmaceutical industries alongside implementation of different infrastructure-development projects, including metro rail, according to another BB official.