Import
Forex reserves below $38 billion despite tightened imports
Bangladesh’s forex reserves remain under stress despite curbing imports.
This is happening due to the selling pressure of US dollars for import LCs, surge in individual demands to meet travel, medical treatment expenses, and tuition fees for Bangladeshi students at foreign universities.
Bangladesh’s forex reserves for July-August will stand at US$38 billion after payment of $1.75 billion import bills due, — of the Asian Clearing Union (ACU) — said an official of Bangladesh Bank.
The central bank will pay this debt by tomorrow. Then the forex reserves will be below $38 billion, to around $37.50 billion, he said.
Also read: Hope amidst forex crisis: Bangladesh received $2.03bn remittance in Aug
Last Thursday (Sep1,2022), the forex reserves of Bangladesh were $39.05 billion.
Bangladesh Bank has been selling dollars from the reserves to bring 'stability' to the forex market. On Thursday, $76 million dollars were sold to some banks.
In total, the central bank has sold $2.57 billion from reserves in two months.
Former Bangladesh Bank governor Atiur Rahman said that despite the increase in remittance, the forex reserves fell due to the continued sale of dollars.
Also read: BB sets cost ceiling for short-term trade finance in forex
"There is no problem even if the reserves fall to $38 billion in the current global context. Because, with this reserve, it is possible to meet the import expenses of more than six months,” he added.
“Imports are falling; remittance and export earnings are increasing. In this situation, it seems that the forex reserves will increase in the coming days,” he hoped.
The central bank sold $7.67 billion from reserves in FY 2021-22 to stabilize the forex market. Bangladesh never sold such a high amount of dollars from the reserve in a single fiscal year earlier.
However, in the previous financial year (2020-21), Bangladesh Bank bought a record $8 billion to keep the forex market stable during the falling trend of imports for the Covid-19 pandemic.
Read Fuel, forex reserves may run out after power crisis: Fakhrul
No bar to import food from Russia, Ukraine: Tipu
Commerce Minister Tipu Munshi on Thursday said the government has no restrictions on importing food products from Russia and Ukraine or any other country.
The minister was talking to the media after a top level government meeting on import of food grains and products held at the secretariat.
He said the importing of food products was discussed at the meeting in detail, and there is no national or international issue regarding this.
Also read: Time to invest in Bangladesh, Tipu Munshi tells Nordic countries
The overall condition of food stock of the country was discussed along with exports today but the matter of fuel oil didn’t come up, said the minister.
“There are globally 24 banks from where Bangladesh can import food with dollars if necessary,” said Tipu.
Also read: Agriculture sector may follow Spain's Almeria model: Tipu Munshi
Replying to a question he said,” The matter of finding lower rate of dollar is a different matter and we didn’t discuss about it.”
Bangladesh to explore all options to import fuel: FS
Foreign Secretary Masud Bin Momen has said they will explore all the possible options including Russia and countries in the Middle East in coordination with the relevant ministries for purchasing fuel.
“Since the instruction has come today (Tuesday), we will work in coordination with relevant ministries. Definitely we will explore all the possibilities,” he told reporters on Tuesday, noting that they need to develop the refining capacity further.
The Foreign Secretary said Bangladesh maintains very good relations with all countries in the Middle East including Saudi Arabia and Qatar. “We have many options.”
He said Bangladesh can also purchase crude oil from Russia like India but Bangladesh needs to develop the capacity to refine Russian crude oil.
Read: No need to hike fuel price if BPC’s corruption and mismanagement end: CPD
The Foreign Secretary indicated that some experts might come from abroad to see how to develop the required capacity for refining crude oil from Russia.
Responding to a question, he said Iran is also a possibility as the Western countries’ negotiation with Iran is underway regarding withdrawal of sanctions. “It’s good to have an increased number of options.”
Prime Minister Sheikh Hasina on Tuesday said the government wants to purchase fuel, fertiliser and wheat from Russia.
She mentioned that she had given the responsibility to her Principal Secretary to talk to the Russian Ambassador in Dhaka regarding the matter.
“The foreign ministry can take initiative in this matter, we will procure fuel oil from them (Russia) with our own funds as the SWIFT is closed and the price of dollars is very much high,” the PM said.
Wheat price falling as India lifts embargo
The price of wheat has gone down by Tk4-5 per kilogram as supply issues eased on the back of India resuming exports through the Hili land port in Dinajpur.
The traders said they bought wheat at Tk36-37 per kg on Saturday, which was Tk 40 -41 per kg last week.
Mustafijur Rahman, general secretary of the Hili land port export-import group, told UNB that the price of wheat decreased due to increased supply recently.
India imposed an embargo on wheat export to maintain supply of the food grains in their domestic market on May 13.
The wheat import allowed by India under the previous LCs since May 29 this year. The importers who opened LCs to import wheat through railway containers now have to import it by road due to some problems with the railway line, Mustafijur said.
The traders said the price of wheat increased to Tk1600 per maund, from Tk950 only before the Ukraine-Russia war. One maund equals more or less 40kg.
Bangladesh’s second staple is wheat and the annual consumption of these grains is nearly 8.5 million tonnes, which is increasing by 5 to 6 percent per year.
Read: Govt constructing modern warehouse to store wheat in Chattogram
Until January of fiscal year 2021-22, India supplied 66 percent of the wheat Bangladesh imported. Of the rest, 15 percent was from Ukraine, 7 percent from Russia, 6 per cent from Canada, and 5 percent from Australia.
Customs seizes large consignment of liquor from Chattogram port
The customs seized one large consignment of foreign liquors from Chattogram port Sunday as the goods were imported under false declaration and through tax evasion.
The consignment of liquor was brought to Bangladesh under the declaration of yarn import from China by faking import permission and using the name of Dong Jin Industrial of Nilphamari's Uttara Export Processing Zone, Saiful Haque, deputy commissioner of Chattogram Customs House, said.
He added: "The seized goods are being counted."
Earlier, the customs seized two large consignments of foreign liquors from Sonargaon and Narayanganj in the early hours of Saturday. The goods were also imported through Chattogram port under false declaration and through tax evasion.
Rice import through Benapole land port resumes after 10 months
Rice import through Benapole land port has resumed after 10 months.
A consignment of 512 tons of rice entered the port Sunday afternoon, which was released from the port Monday morning.
M/S Belal Hossain and M/S Lipu Enterprise are importing rice at the rate of USD 340 per ton.
Benapole customs authority has fixed import duty on fine rice at USD 450 per ton and on coarse rice at USD 380 per ton.
Importers are paying Tk9.90 as import duty for every kilogram of rice.
Md Motiar Rahman, Director of India-Bangladesh Chamber of Commerce (IBCC), said that the government stopped importing rice from India on August 31, 2021 to ensure proper market prices of rice produced in the country.
Read: Onion imports through Benapole resume after 2 months
“Prices of rice shot up after recent floods in the country. The government allowed 95 importers to import 4.09 lakh mts of rice from India on June 30 to keep the rice market stable. Import of rice through the Benapole port began following the decision,” said Motiar.
Shamsur Rahman, President of Benapole C&F Agents Association, said that of the total amount of imported rice, boiled rice is 3,79,000 metric tonnes and non-boiled rice is 30,000 metric tonnes.
The food ministry has ordered to complete the LC-opening process within July 21 and marketing of the imported rice within August 11, said Shamsur.
Azim Uddin, a C&F trader, said that the rice consignment had to wait 17 days in Indian part before getting access to Benapole land port.
“Rice can be imported quickly if the consignments can get access to the port directly, which will in turn reduce the prices of rice in the local market,” said Azim.
Instability in onion price as import declines through Hili land port
A recent decline of onion import from India through Hili land port has raised the retail price to Tk 10-12 per kg and wholesale price to Tk 14-15 per in the market.
Indian Nashik onion was being sold at Tk 44-46 which was being sold at Tk 35-36 per kg just two days ago, and Indore onion price rose to Tk 40 per kg from Tk 30-32 at retail market in Hili land port area on Saturday.
Meanwhile the price of local onions hiked Tk 10 and is being sold at Tk 58-60 per Kg now.
Also read: Drive to control commodity prices: Two onion traders fined
As the onion import is lower than the demand in the market hence the price rose, said Moinul Sheikh and Ferdous Hossain, two traders of the market.
However, they said the price may decline soon after the import goes back to normal.
Last week 25-30 trucks of Onion had been imported from India but this week it declined to 18-20 trucks , said Sohrab Hossain Mallik, PRO of Panama Hili Port, a private operator of the land port .
He said, “On Thursday 571 MT of onion entered from India in 21 trucks and the import remained uninterrupted on Saturday.”
Also read: Man held with 8 gold bars in Hili
Harun-Ur-Rashid, president of the importer-exporter group of the port said,” As import has declined and onion price in India has increased, currently the price is a bit high in the market. It will lower with the escalation of imports.”
Export-Import through Benapole land port suspended
Export-import activities between Bangladesh and India through Benapole land port remained suspended since Monday morning due to an indefinite strike called by Petrapole port workers of India.
Karthik Chandra Chakraborty, general secretary of Indian Petrapole C&F Agent Staff Welfare Association, said the strike was called protesting various harassment by theb LP manager at Petrapole port.
"We are already in business trouble due to Covid-19 outbreak. In addition, the new LP manager is harassing traders by enforcing new rules at entry points,"he added.
Read: Gas supply suspended in B’Baria as pipeline gets damaged
He also said that no transport staff is allowed to enter ICP and port without a unique card.
However, the loading and unloading process at our port is going on at a normal pace, said Mamun Tarafdar, deputy director of Benapole port.
Bangladesh plans to import huge petroleum fuel amid global market volatility
Bangladesh has planned to import 6.4 million metric tons (MT) of fuel oils for the calendar year 2022 amid the overheated international market.
The global oil market remained volatile as petroleum prices have gone up to a highest $83 per barrel for crude oil and $93 for refined fuel from below $30 for crude and $40 for refine.
In terms of quantity, this is one (1) million MT up from the current year’s total import as the country imported 4.544 million MT in 2021 to meet its requirements up to December this year.
Read: BPDB’s extra purchase order of petroleum puts BPC in troubleThe figure came from the annual import plan of Bangladesh Petroleum Corporation (BPC) which was already approved by the Cabinet Committee on Economic Affairs, the highest policy approval body.
In the proposal, the BPC made the petroleum forecast mentioning that the Covid-19 situation has improved with vaccination of 10 percent of the population and the regaining of the country’s economic activities resulting in an increased price of petroleum fuels.
However, the country’s principal petroleum marketing body did not give any indication of financial involvement to execute its fuel import plan.“We’ve just received a nod from the government’s highest policy level. But no cost has so far been calculated,” said Syed Mehedi Hasan, director (operations and planning).“Hope, we can make an estimate about the possible cost by next month,” he told UNB.
BPC documents also show that it has taken approval for the import of another 670,000 MT of refined fuel to “deal with any emergency situation” caused by the rise in fuel demand.Though the BPC did not calculate the possible cost, the economists and energy experts are worried about the escalation in the cost in petroleum import.They said it is obvious the country’s petroleum import bill will go up enormously in 2022 for two reasons -- one for higher quantity of imports and another for higher price in petroleum on the global market, said Dr Khondaker Golam Moazzem, Centre for Policy Dialogue (CPD) director (research).
Considering the upward trend in price and demand, he calculated that the country may have to spend $3.94 billion (equivalent to Tk 33,056.6 crore) in 2022 to import the proposed 6.4 million MT of petroleum. The calculation was made including the existing 34 percent taxes in the cost.
He said this means the country will need to pay an extra $516 million in 2022 over its spending of $3.424 billion in 2021.
Read: CPD for reinstating previous fuel prices
If 34 percent overall taxes are waived, the cost will come down to $2.94 billion, said Dr Golam Moazzem, who believes the government should cut the taxes on import of petroleum to give a relief from the burden of high cost of fuel for the sake of economic recovery from the shock of the Covid-19.
Proposals for LNG, petroleum, wheat import get clearance
The Cabinet Committee on Public Purchase at a meeting on Wednesday approved 12 proposals, including the import of LNG, liquid petroleum and wheat.
The meeting also endorsed the installation of a 50MW solar power plant in private sector to supply electricity to the government entity.
Besides, two proposals received approval in principle of the Cabinet Committee on Economic Affair (CCEA) for the purchase of a huge number of syringes to be used for Covid-19 vaccination and also the import of petroleum for meeting local demands.
As per the approvals of the CCEA, the Department of Drug Administration under the Public Health Service Division received a nod to procure 11 crore auto disable (AD) syringes for vaccinating people from the local JMI Syringes and Medical Devices through a direct procurement method.
The BPC will purchase 80,000 metric tons of furnace oil, known as heavy fuel oil, from different countries under the G-to-G contracts.
Read Cabinet committee approves 4 proposals, including LNG import
Of the proposals approved by the Cabinet Committee on Public Purchase, the state-owned Petrobangla will import some 33.60 lakh MMBtu LNG (liquefied natural gas) from the international spot market through quotation.
Vitol Asia Pte, Singapore, will supply the bulk LNG at a rate of $29.89 per million British thermal units (MMBtu).
About the proposal, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said so far this has been the highest rate at which Bangladesh has to import LNG from international market.
“We don’t there where the price will go up….the prices of both gas and liquid petroleum are rising fast... it’s a big concern for us,” he told UNB.
A proposal of the Power Division under the Ministry of Power, Energy and Mineral Resources to set up a 50MW solar power plant by a private sponsor received the approval.
As per the proposal, the Joint Venture of (1) Hero Future Energies Asia Pte Ltd, Singapore and (2) Business Research International Corporation Inc. (BRIC), Panama will set up the plant in Terkhada area in Khulna and the state-owned Bangladesh Power Development Board (BPDB) will purchase electricity over 20 years.
Read Bangladesh signs MoU with Malaysia on LNG supply
Nasrul Hamid said pharmaceutical company Reneta is the local agent of the BRIC.
The BPDB will have to pay a total of Tk 1,328.90 crore to the sponsor company for the purchase of the electricity at a rate of 10.25 US Cents (equivalent to Tk 8.20) per kilowatt hour.
Another proposal of the power division also received the approval of the committee to award a contract to J&C Impex Ltd., Dhaka, to procure and install the Hot Gas Path Inspection of the Gas Turbine of the 225 MW Shikolbaha Power Station at Chattogram at a contract value of Tk 102.94 crore.
A proposal of the Food Directorate General of Food Ministry to import 50,000 metric tons of wheat from Singapore-based Agrocorp International Pte Ltd. at Tk 179.53 crore received the committee’s approval.
The committee also approved proposals for awarding contracts for printing and supply of books for education boards, import of 30,000 metric tons of fertilizer and construction of a number of roads under the roads and highways department.