24 int’l banks to accept LCs in dollars

Twenty four international banks have agreed to accept letters of credit (LCs) from Bangladesh for the import of grains from Russia and Ukraine in US dollars, apparently ushering relief from the spiralling of local food prices, said Commerce Minister Tipu Munshi yesterday. 

If necessary, the government will import food items from international markets to tackle the rise in prices, he said.

After a meeting with peers at Bangladesh Secretariat in Dhaka, Munshi told the waiting journalists that from now there should not be any confusion on whether Bangladesh would import food items from Russia and Ukraine.

The minister said his peers had confirmed that there were no sanctions on the import of grains from Russia and Ukraine.

However, the minister did not state particularly when and how much food items would be imported from the two countries as they only held discussions and were yet to take a decision.

He also did not disclose the names of the 24 banks.

Since the beginning of the Russia-Ukraine war on February 24, the price of wheat flour has increased sharply in local markets as Bangladesh imports wheat mainly from the Black Sea region.

According to the Observatory of Economic Complexity, more than half of Bangladesh's wheat imports are from the two countries, according to a report published on The Daily Star on May 18 this year.

For instance, in 2020, Bangladesh imported $1.28 billion-worth wheat, which was the top import (2.65 per cent) among traded foodstuffs.

The highest share was imported from Russia (31.8 per cent) worth $409 million and from Ukraine (23 per cent) the import was worth $295 million.

Similarly, in 2020, a significant portion of dried legumes, corn, onion, rapeseed, apples and pears were imported from those countries.

Munshi said the cabinet ministers also discussed about the possibility of using currencies other than the US dollar, like the Chinese renminbi and Russian rouble, as the country has been going through a shortage of greenbacks to meet import bills.

However, no decision was taken in this regard, he said, adding that the government was trying to keep dollars at an affordable rate to meet the demand for imports.

Salman F Rahman, adviser to the prime minister on private industry and investment, said they also held discussions on the export of drugs from Bangladesh to Russia and import of fertiliser and wheat from Russia.

Rahman said an opportunity has been created for the export of medicine to Russia as the demand has increased in that market.

However, registrations with the Russian drug administration over their use of 26 locally made drugs need to be extended and this was also discussed, he said.

Rahman also said there was a sanction on Russian export of petroleum products and its import was also discussed.

Food Minister Sadhan Chandra Majumder said the government would begin selling rice under its Open Market Sale (OMS) programme, which offers subsidised prices, from September 1 to rein in skyrocketing prices of the staple in the local markets.

Every person will be able to purchase a maximum of 10 kilogrammes of rice from trucks of the Trading Corporation of Bangladesh, he said. However, the minister did not mention how much the rice would cost.