The country's importers have started feeling the heat of price escalation of Chinese products due to appreciation of Yuan against US dollar, high inflation and lobour cost.
"Import cost of Chinese finished products has marked more than 40 per cent rise," said a leading local agricultural equipment importer and dealer in the city's Nawabpur area Thursday.
However, the high price of Chinese products, which will fuel the country's import cost and affect the general consumers, might come as a relief for local entrepreneurs and manufactures facing competition, business analysts said
"Price hike of the Chinese products might raise hope for the local industrialists and manufactures to go for substituting the imports," said Mustafizur Rahman, executive director of the centre for policy dialogue (CPD).
"Many local manufacturing units that were struggling to compete with the Chinese products in the past can seize the advantage now," he said.
Bangladesh imported goods worth more than US$ 2.5 billion from China in the last fiscal. The amount might be more than $3.0 billion in the outgoing fiscal.
The import goods include raw cotton, boilers, machinery and mechanical appliances, knitted fabrics, man-made staple fibre and hand-made filament, electric machinery and equipment, fertiliser, buses and covered vans, organic chemicals and special woven fabrics from China.
The latest price hike of Chinese products has been attributed to appreciation of Chinese currency by nearly 20 per cent annualised in the first quarter of this year and rate of inflation at 8.5 per cent in April.
Price situation is so volatile in China that its exporters and dealers are not delivering products at quoted LC (letter of credit) prices. They are charging price on the basis of the date of delivery, said the importers.
The CPD executive director said despite price rise of the Chinese products, they are still cheaper than finished products in India, Thailand, South Korea and Japan.
He, however, said it will be appropriate for the local businessmen and entrepreneurs to evaluate the situation and fix their business plan.
The higher productivity of the Chinese entrepreneurs is a big advantage for them, he said.
"Local entrepreneurs need to substitute the imports and increase productivity by taking the advantage of rising prices of Chinese products," he said.
Local importers bring in lots of Chinese readymade garments as those had better competitive advantage over locally produced garments. But the trend is now declining due to price hike of Chinese products.
