Import payments in the first two months of the current fiscal year (2017-2018) increased by 31.55 per cent year-on-year due mainly to surge in rice import, increase in the prices of crude oil in the international market and substantial depreciation of the taka against all major currencies.
According to the latest data of Bangladesh Bank, the overall import bill payments stood at $9.42 billion in July-August of FY18 against $7.16 billion in the same period of FY17.
Rice import by the country substantially rise in the period amid crop losses, mainly boro paddy, in the flash floods in the country’s north-eastern haor areas and depleting public stocks as well as rising prices of staple in the domestic market.
The government may import 12 lakh tonnes of rice in the current fiscal year while private sector importers will also import sizeable quantity of rice.
According to the central bank data, import settlements for food grains mainly rice and wheat rose by 168.17 per cent to $316.66 million in July-August of the year from that of $118.08 million in the same period of last fiscal year.
Food grains import had increased by only 2.78 per cent in July-August of FY17.
A higher growth in petroleum product import also contributed to the rise in import payments as petroleum product import grew by 29 per cent in the period due mainly to a price hike of the commodity in the international markets.
The country settled import payments worth $390.75 million for petroleum in the first two months of FY18, which was $303.10 million during the same period a year ago, the data showed.
Prices of petroleum products have been increasing in the international markets over the last few months, putting pressure on import payments of the country which is dependent on import of the petroleum products to meet its demand for the products.
The value of local currency, taka, has been depreciating against the all international major currencies — US dollar, euro and pound sterling — for last few months, which also pushed the cost of import up, officials said.
They said that though exporters were getting benefitted for the depreciation, importers had to pay more for the same volume of products.
Higher growth in import of capital machinery and industrial raw materials also contributed to the increase of import payments in the period.
In July-August, import of capital machinery grew by 38 per cent to $1.89 billion from $1.37 billion during the corresponding period of FY17.
On the other hand, import of industrial raw materials, mainly meant for readymade garment factories, increased by 19 per cent year-on-year to $3.05 billion in July-August from that of $2.56 billion a year ago, the data showed.
Former BB governor Salehuddin Ahmed on Saturday told New Age that rising import, price of petroleum oil in the global market and depreciation of the taka would increase pressure on balance of payment of the country if simultaneously export earnings did not grow significantly.
Rise in rice import and petroleum price hike are unavoidable in the existing reality but the authorities will have to increase its management capacity and monitoring to check the import of luxury and less important goods, he said.
The central bank and the customs will also have to increase its monitoring to check over valuation of imported goods, he added.
The opening of fresh letter of credits, generally known as import orders, increased by 54.16 per cent to $11.25 billion in July-August of 2017 from $7.3 billion in the same period of 2016.
The higher growth in opening of LCs means that the imports would increase more in the coming months, officials of the central bank said.
They said that import payments for food grains particularly rice would continue to rise as part of the government’s effort to stabilise the prices of the item in the domestic market and boost the public stock for future demand.
The overall import payments in FY18 may surpass the last year’s payment if the trend continues, they added.
In FY17, the total import payments stood at $43.49 billion.