Imports look upward with Ramadan in sight

Imports seem to be on the rebound after a slump for months now, as Ramadan is approaching, bankers said.
New letters of credit for imports surged to $3.49 billion in March, which is 21.60 percent higher than a month ago and nearly 16 percent more than that in the same month a year ago, according to Bangladesh Bank.
In April, LCs worth $3.32 billion were opened, up by nearly 20 percent from the same month a year ago.
However, the value of the LCs opened in the first 10 months (July-April) of the current fiscal year stood at $29.96 billion, slightly lower than $30 billion for the same period last year.
“Imports are showing an upward trend recently. Imports through our bank have been witnessing more than 20 percent growth for the last couple of months,” said Abdus Sobhan, a treasury official at Jamuna Bank.
The official said edible oil and wheat are being imported as the month of Ramadan will begin in July. Steel sheets and raw materials are also on the import list, he added.
The recent political instability has created an anti-business environment, forcing entrepreneurs to shelve expansion plans, let alone undertaking new projects.
This resulted in a negative import growth of capital machinery and raw materials. Import of food grains (rice and wheat) also decreased in the period due to a rise in domestic production.
Motiur Rahman, head of treasury at Prime Bank, said import of raw materials and capital machinery also rose in recent months, rebounding from a slowdown in the last one year.
Data from JP Morgan's local office also shows that imports are on the rise.
“Imports have gone up targeting Ramadan,” said Sazzad Anam, country head of JP Morgan, which provides services to Bangladeshi clients in cash management and trade and liquidity products, with a focus on cross-border payment and trade finance.
The central bank also said the overall imports have increased in recent months.
“The number of LCs has gone up, but it is not for Ramadan only,” said Kazi Sayedur Rahman, general manager of foreign exchange and treasury management department of the BB.
Rahman said the import cost for Ramadan items will not exceed $10 million.
Import LCs worth $36.93 billion were opened in fiscal 2011-12 against $38.58 billion a year ago, with the major items being petroleum products and oil, machinery and parts, soybean and palm oil, raw cotton, iron and steel and wheat. Bangladesh's major import partners are China and India, accounting for a combined 30 percent of the total imports.

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