Record oil purchase pushes up imports

Siddique Islam

Bangladesh's imports grew by more than 6.0 per cent in the first two months of fiscal year 2018-19, after a record 105.07 per cent increase in oil, officials said.

The actual import in terms of settlement of letters of credit (LCs) rose to $ 8.52 billion during the July-August period of FY 19 from $ 8.04 billion in the same period of the previous fiscal, according to the central bank's latest statistics.

But opening of LCs, generally known as import orders, decreased by more than 1.0 per cent to $ 10.02 billion in the first two months of FY 19 from $ 10.13 billion in the same period of the previous fiscal.

"The overall import expenses increased mainly due to higher import of petroleum products during the period," a senior official of the Bangladesh Bank (BB) told the FE while explaining main reason for the rising trend in import payments.

Import of petroleum products rose to $ 791.68 million from $386.06 million.

The rising trend in fuel oil prices in the global market has pushed up the overall import payment obligations during the period under review, the central banker explained. Besides, oil-based power plants have also boosted the import of petroleum products, he added.

On the other hand, import of capital machinery or industrial equipment used for production came down to $ 787.08 million from $825.02 million.

The declining trend in capital machinery import may continue in the coming months ahead of the upcoming general election, according to the central banker. He also said most of the businessmen are now adopting a 'wait-and-see' policy for either setting up new industrial units or expanding their existing businesses.

However, import of intermediate goods, like coal, hard coke, clinker and scrap vessels, increased by 13.46 per cent to $711.13 million from $626.75 million.

Industrial raw material import also rose by 5.78 per cent to $ 3.11 billion during the period under review from $ 2.94 billion in the same period of the FY 18.

Talking to the FE, Mehmood Husain, managing director (MD) and chief executive officer (CEO) of NRB Bank Limited, said the existing trend in overall import may continue in the near future.

"Higher import of fuel oil may continue in the coming months because the rising trend in both prices and quantity persists," the senior banker noted.

On the other hand, the falling trend in the imports of consumer goods and food grains may continue in the near future, Mr. Husain added.

"Import of intermediate goods is expected to continue in the coming months for the implementation of different construction projects across the country," he noted.

However, food grain imports, particularly of rice and wheat, dropped by 27.88 per cent to $ 221.18 million from $ 306.67 million.

Import of consumer goods decreased by 18.70 per cent to $ 889.06 million during the period under review from $1.09 billion, the BB data showed.

• Courtesy: The Financial Express/ Oct 18, 2018