Food-grain imports drop over 42pc in July-December

SAJIBUR RAHMAN | Published: February 21, 2024 23:38:33

Bangladesh's food-grain imports from international markets plunged during the July-December period of fiscal year 2023-24, according to central bank data, amid ongoing import restrictions to stabilise the strained dollar stocks.
Food grain imports, primarily rice and wheat, totalled nearly $767.10 million from July to December 2023-24 -- a 42.05 per cent decrease compared to the same period in the previous fiscal year.
Rice imports saw a 97.62 per cent decline to $9.30 million, while wheat imports fell 18.82 per cent to $757.80 million in the July-December period of FY24.
The decrease in food grain imports contributed to a decline in overall customs-based imports during the first half of FY24.
Other import categories, including intermediate goods (down 20.36 per cent), capital goods (down 23.45 per cent) and consumer goods (down 19.56 per cent), also saw declines compared to the same period in FY23.
Food grain imports, mainly rice and wheat, reached around $2.6 billion in FY23, representing a 1.5 per cent increase from the previous FY.
Rice imports amounted to $571 million and wheat imports to $2.03 billion in the last fiscal year.
Bangladesh, a major importer of wheat from Ukraine, previously relied heavily on the Black Sea country. Blocking Ukraine's ability to export grain created an opportunity for Russia to increase its share of global markets, according to local importers.
The Russian Grain Union estimates that hard wheat exports soared 1,300 per cent year-on-year to 657,000 tonnes between July 1 and November 10, 2023.
Biswajit Saha, director of City Group (parent company of Teer brand), said the rising value of the dollar weakens its purchasing power, making it less attractive for borrowers seeking bank loans.
Consequently, borrowers can import fewer goods with the same loan amount.
Saha added that importers have been advocating for a revision of the single-borrower exposure limit. Importers are now offering up to 100 per cent cash margins for opening letters of credit (LCs) to import food grains.
Under the Bank Company (Amendment) Act of 2023, banks are restricted from exceeding a 25 per cent exposure limit to any single entity, group or counterparty for both funded and non-funded credit.
Besides, central bank regulations stipulate that funded exposure to a single entity or group cannot surpass 15 per cent of a bank's capital at any given time.
On November 8, 2022, the central bank temporarily relaxed the 25 per cent single-borrower exposure limit for coal-based power producers for a five-year period.
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