As $2.5b import bill looms in Ramadan, BB opens crisis cell

When importers are having trouble opening LCs for daily commodities, the commerce ministry has estimated that $2.5 billion will have to be spent on the import of seven consumer goods to meet the increased demand during the forthcoming month of Ramadan set to begin in March.

To keep the LC process smooth in the midst of the prevailing dollar crisis and to ensure the normal supply of daily commodities, the Bangladesh Bank will create a "crisis management cell", Commerce Minister Tipu Munshi said on Sunday.

Besides, the commerce ministry will form a coordination committee comprising prominent business persons so that the business community can report its problems to the government, he added while addressing a meeting of the Trade Support Advisory Committee – which consists of private-sector businesspeople and deals with general trade and investment matters including import and export – at the secretariat.

Speaking to reporters after the meeting, the commerce minister acknowledged that importers in the country are facing problems in opening LCs.

Several businessmen who were present at the meeting told The Business Standard that the members of the advisory committee expressed their displeasure over the authorities' inaction in punishing money launderers and those causing an artificial crisis of daily commodities in the market.

Infographic: TBS

Besides, they refuted the Export Promotion Bureau's export data for this November, saying that the actual export earnings in the month would be much lower than the EPB figure of $5 billion.

In the meeting, Commerce Secretary Tapan Kanti Ghosh made a presentation on the overall business and investment situation of the country. 

The presentation showed that Bangladesh will have to spend $2.5 billion on imports of grams, lentils (masur dal), dates, crude soybean oil, palm oil, sugar, and wheat to keep the market well supplied during Ramadan.

Of the total amount, $812 million will be spent on the import of 22.19 lakh tonnes of wheat, $974 million one seven lakh tonnes of edible oil, and $385 million on eight lakh tonnes of sugar.

The import costs of grams, dates, and lentils for the upcoming Ramadan have been estimated at $134.49 million, $52.67 million, and $140.64 million, respectively, said the commerce secretary.

Minister Tipu Munshi told the media, "Traders have reported various problems including LC opening issues. To solve these problems, we will write to the relevant government offices including the Bangladesh Bank, and follow up. We will take actions that need to be taken to solve the problems."

"We have requested the businesses to import essential items so that consumers do not suffer during Ramadan," he added.

City Group, the largest commodity importer, said that they were facing problems in opening LCs, the commerce minister mentioned, adding, "Officials of the Bangladesh Bank were present at the meeting. We asked the businesspeople to inform the Bangladesh Bank about any problem they face in opening LCs for the import of everyday essentials."

The Bangladesh Bank will issue a circular regarding the opening of LCs for daily commodities in the next two to three days, he said.

Action against money launderers, price manipulators stressed

Shafiul Islam Mohiuddin, former president of the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), said in the meeting that the reputation of the business community is being damaged because of a handful of "black sheep" money launderers. He asked for action against them.

Action should also be taken against those who are increasing the prices of various products including sugar by creating an artificial crisis, he added.

Mahbubur Rahman, president of the International Chamber of Commerce and Industries, Bangladesh, expressed doubts about whether the commerce ministry has any power to supervise the market. It is powerless to take any action against dishonest businessmen for political reasons, he alleged.

Later, in response to questions from journalists, the commerce minister said, "All those who trade in products are not angels. There is a problem with sugar in some areas. We will put dishonest traders behind bars if necessary."

The minister also said that he will write to the National Board of Revenue about duties on sugar imports. Sugar mills in the country are still facing shortages, he maintained.

90% exporters facing problems in opening LC

Exporters told the meeting that although they should not have any problem in opening back-to-back LCs, they are facing new problems due to the issuance of various circulars by the Bangladesh Bank.

A top exporter present at the meeting told TBS that the central bank on 20 October issued a circular stating that if a bank fails to settle LCs on time, its authorised dealer (AD) licence will be cancelled and action will be taken against the bank officials concerned.

"In the current situation, foreign buyers are failing to pay the prices of products on time. As a result, we are also unable to make back-to-back LC payments within the stipulated time. If one wants to open a back-to-back LC in a new bank without settling the previous LC, banks are declining to open the LC," he said and claimed that 90% of ready-made garment exporters are facing this problem.

He requested the commerce minister for his intervention to solve the problem, he added.

Arguments over EPB export data

According to the EPB, Bangladesh's single-month export receipts reached an all-time high of $5 billion this November.

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), disagreed with the information at the meeting. At a time when there is a crisis of gas in the country, and export orders have decreased, the high amount of export income shown in EPB data does not match the information of traders.

Bangladesh Bank and NBR officials present in the meeting, however, contested Hatem's statement.

They claimed that they have information about the volume of exports by any exporter to any company in any country, and therefore, the export data of the EPB is accurate.

Mohammad Hatem told TBS that the government agencies may have given correct information, but traders feel that the EPB data does not match the statement of utilisation declaration and the information provided by various banks on exports.