Overall trend of opening import LCs rises ahead of Ramadan

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FE Report
Opening of fresh letters of credit (LCs) against imports have significantly increased during the nearly first two months of the current fiscal against the corresponding period of the previous fiscal.
The overall trend of opening of LCs against imports, ahead of the holy Ramadan, increased by 20.32 per cent during the first 54-day of the current fiscal against the first 55-day of the previous fiscal, official sources said.
During the period, the opening of import LCs of some essential items including rice, wheat, sugar, milk food, edible oils, pulses and onion also rose to meet the growing demand of the essentials in the local markets.
A large quantity of essential commodities particularly wheat, pulses, onion and edible oils will be imported to meet the growing demand of consumers during the month of Ramadan, a religious month for Muslim community, the sources added.
The import LCs worth US$ 2.943 billion were opened during the period as against $2.446 billion of the corresponding period of the last fiscal, according to the Bangladesh Bank (BB) statistics.
Meanwhile, the central bank asked the commercial banks to provide information about the value and quantity of eight essential imported items to know the actual picture of the country's supply situation.
"Opening and settlement of LCs against imports will increase further to meet the growing demand of the essential items ahead of Ramadan," a BB senior official told the FE Sunday.
Bankers, however, said both opening and settlement of LCs against food grains have increased and the existing trend will continue up to Ramadan.
On March 12 last, the central bank directed the commercial banks to promote businesses, particularly small and medium ones, for opening fresh LCs against imports to ensure adequate supply of essentials in the markets.
The BB also asked the banks to be flexible while opening fresh LCs for import of essential commodities.
Regarding the prices of essentials, a senior official of a commercial bank told the FE that the prices of some essential items including wheat continued to maintain an upward trend in the local markets because prices of the same are soaring in the international markets.
On the other hand, the prices of edible oils are expected to decline due to increase in the supply of the item in the local markets.
"We are hopeful about reducing the prices of edible oils as the sale of super palm oil has started again in the market," President of the Bangladesh Whole Sale Edible Oil Merchant Association Sher Mohammad told the FE Sunday.
He also said the government must take steps to ensure smooth supply of the edible oils across the country.
Market operators, however, said the prices of the overall essentials would be stable if the government curbs syndications of importers through using its different tools like strengthening monitoring system of both price and supply.
According to the central bank statistics prepared for August 1 to 23 last, the opening of LCs for rice increased by $64.48 million in term of value, for wheat by $38.17 million, for sugar by 9.99 million, for milk food by $4.10 million, for edible oils by $47.35 million, and for onion by $3.47 million against the corresponding period of the previous fiscal.