Import falls for lacking of dollar

Mahfuja Mukul: Due to the dollar crisis, the government and Bangladesh Bank’s initiative to curb imports has reduced the country’s imports significantly. The import of most of the products has also decreased. In the first six months (July-December) of the current fiscal year, imports of foodgrains fell by 16 percent and capital machinery by 11 percent. This information is known from the latest report of Bangladesh Bank.
According to the data of Bangladesh Bank, in the first six months of the current fiscal year, overall import decreased by 2.20 percent to $4,119 million. In the same period of the previous financial year, the expenditure on imports was $4,212 million.
Industry stakeholders said that imports of foodgrains and capital goods have decreased in recent times due to the dollar crisis. There is dollar uncertainty in the bank. Opening LC also has problem in some cases. The prices of products in the world market are fluctuating. Due to these reasons, imports have decreased.
According to statistics, in the six months of the current financial year, $132 million were spent on the import of food grains. In the same period of the last financial year, this expenditure was $158 million. As a result, the import cost of food grains has decreased by 16.7 percent. During this time, rice import decreased by 1.8 percent and wheat by 21.6 percent. However, the statistics of Bangladesh Bank do not include how many tons of rice and wheat were imported during the two periods.
Besides, the import of capital goods decreased by 11.1 percent in the first six months of the current financial year. Its capital equipment imports fell by 3.7 percent.
In six months, the import of capital equipment was $266 million. The same period of the last financial year was $276 million. On the other hand, the import of other capital equipment decreased by 14.8 percent.
According to the information received, the overall import expenditure of consumer goods increased by 11 percent in the first six months of the current financial year. During this period, edible oil was imported worth $175 million. It was $138 million in the same period of last financial year. That is, the import cost of edible oil has increased by 26.8 percent. However, during this time, the import cost of sugar has decreased by 21 percent. Sugar $41 million in six months. The same period last financial year was $52 million. Import expenditure on pulses stood at $380 million, up 13.5 percent from the same period last fiscal.
The government is discouraging the import of non-essential goods. Additional tax has been levied on several products. However, as fertilizers are very important for agricultural needs, no restrictions have been imposed on their import. Fertilizer imports worth $3.38 billion during the July-December period, which is 67 percent higher than the same period last fiscal. At that time, $202 million were spent on importing fertilizers. Fertilizer prices in the international market, however, have increased significantly compared to the same period of the last financial year.
Meanwhile, the cost of imports of intermediate goods, especially industrial raw materials, has decreased. Import of intermediate goods in six months was 2 thousand $551 million. It was $2,548 million in the same period of last financial year. Import cost of crude oil among intermediate products decreased by 4.5 percent. It fell to $460 million from $490 million in the previous same period. However, the import of raw materials for some industries, including ready-made garments, has increased. Cotton imports were worth $2.68 billion, which is 32 percent higher than the six months of the previous fiscal year.
On the other hand, other intermediate products increased by 5 percent. However, in six months, the import of oilseeds decreased by 23 percent, pharmaceutical products by 74 percent and plastic and rubber products by 10 percent.
To reduce imports, the government has increased the duty rate of relatively less essential and luxury goods. 100% and 75% cash deposit has been made mandatory at the time of LC for import of several products. And since last August, the central bank has been holding and verifying the products of large LCs. The Central Bank has to be informed before opening the LC.
The deficit in the current account balance of foreign transactions in the country has decreased slightly. In the first six months (July-December) of the current fiscal year 2022-23, the deficit stood at $527 million, which was $829.7 million in the same period of the last financial year. Accordingly, the deficit in the current account balance has decreased by $302.70 million.
Along with the current account, the merchandise trade deficit has also decreased. In the first six months of the current fiscal year 2022-23, the merchandise trade deficit stood at $1,230 billion, which was $1,570 billion in the same period of the previous fiscal year. Accordingly, the trade deficit decreased by $3.4 billion in the span of six months.
Meanwhile, new LC openings fell by 52 percent in 2022 due to various measures. When asked about the reduction in the import of these products, the former president of Dhaka Chamber of Commerce and Industry (DCCI) Abul Kasem Khan said that the government and Bangladesh Bank control imports when there is a crisis in the country’s economy. Due to regulation, the economy is affected. Because we are an import dependent country.
Due to import control, business is slowing down in many companies. They could not open LC to import many essential items. Imports of these products have decreased due to reduction in LC opening. If it decreases like this, there will be many effects in the production sector and food products in the future.