Commodity prices fall reduces import payment substantially
Wednesday, 24 September 2008
Shakhawat Hossain
The country's import payment has gone down substantially due to price fall of commodity items in the international market, which has eased pressure on the balance of payments (BoP), central bank officials said Tuesday.
Experts, however, said general people are not getting the benefit of falling prices of commodity items in the international market due to weak market monitoring by the government.
"Commodities worth US$ 1.81 billion were imported in August this year, which is lower by at least $531 million compared with the payment made in July," said a central bank official.
The sharp decline in import payment has been attributed to the fall in prices of items like petroleum products, wheat and edible oil in the global market and lower demand for rice in the domestic market.
The lower import payment is good for the country's BoP, said the official, adding that the import payment might fall further in coming months.
The country's BoP was under pressure throughout the fiscal 2007-08 due to record import of rice to make up the local production shortfall caused by successive floods and a cyclone.
Besides, record price of fuel oil in the international market pushed the import payment at $20.32 billion in 2007-08 compared to the import payment worth $15.11 billion in 2006-07.
The country had to seek emergency assistance worth about $218 million from the international monetary fund (IMF) to ease the pressure on the BoP.
Bangladesh Institute of Development Studies (BIDS) director Zaid Bakth said lower import payment for commodity item is good for the BoP, but the country's people are not getting its benefit.
"The general people are deprived of the benefit due to weak market monitoring and greed of importers and the traders," he said.
Another expert said the government should immediately cut fuel price in the domestic market to curb inflation.
Per barrel oil price fell by more then 30 per cent from record $147 on July 11 in the international market until last week that helped state-owned Bangladesh Petroleum Corporation (BPC) to reduce losses in diesel and kerosene sale by more than 300 per cent.
"The fall in oil price will allow the importers and traders to reduce the prices of commodities," he said, adding that it would help ease the inflation.
BPC's loss for marketing a litre kerosene and diesel has fallen to Tk 12 per and Tk 11.50 per litre from Tk 50 previously.
However, a reverse trend in fuel oil prices during the last couple of days might force the government to review its decision to revise the domestic prices of the same.
Diesel and kerosene account for more than 80 per cent of the country's total oil consumption and over 95 per cent of BPC's annual losses.
The Bangladesh Bureau of Statistics (BBS) officials said the non-food inflation is high both in urban and rural areas after government hiked the price of fuel in the domestic market in late June.
The high non-food inflation pushed up point-to-point inflation in July at 10.82 per cent, a six-month high, they said.
The country's import payment has gone down substantially due to price fall of commodity items in the international market, which has eased pressure on the balance of payments (BoP), central bank officials said Tuesday.
Experts, however, said general people are not getting the benefit of falling prices of commodity items in the international market due to weak market monitoring by the government.
"Commodities worth US$ 1.81 billion were imported in August this year, which is lower by at least $531 million compared with the payment made in July," said a central bank official.
The sharp decline in import payment has been attributed to the fall in prices of items like petroleum products, wheat and edible oil in the global market and lower demand for rice in the domestic market.
The lower import payment is good for the country's BoP, said the official, adding that the import payment might fall further in coming months.
The country's BoP was under pressure throughout the fiscal 2007-08 due to record import of rice to make up the local production shortfall caused by successive floods and a cyclone.
Besides, record price of fuel oil in the international market pushed the import payment at $20.32 billion in 2007-08 compared to the import payment worth $15.11 billion in 2006-07.
The country had to seek emergency assistance worth about $218 million from the international monetary fund (IMF) to ease the pressure on the BoP.
Bangladesh Institute of Development Studies (BIDS) director Zaid Bakth said lower import payment for commodity item is good for the BoP, but the country's people are not getting its benefit.
"The general people are deprived of the benefit due to weak market monitoring and greed of importers and the traders," he said.
Another expert said the government should immediately cut fuel price in the domestic market to curb inflation.
Per barrel oil price fell by more then 30 per cent from record $147 on July 11 in the international market until last week that helped state-owned Bangladesh Petroleum Corporation (BPC) to reduce losses in diesel and kerosene sale by more than 300 per cent.
"The fall in oil price will allow the importers and traders to reduce the prices of commodities," he said, adding that it would help ease the inflation.
BPC's loss for marketing a litre kerosene and diesel has fallen to Tk 12 per and Tk 11.50 per litre from Tk 50 previously.
However, a reverse trend in fuel oil prices during the last couple of days might force the government to review its decision to revise the domestic prices of the same.
Diesel and kerosene account for more than 80 per cent of the country's total oil consumption and over 95 per cent of BPC's annual losses.
The Bangladesh Bureau of Statistics (BBS) officials said the non-food inflation is high both in urban and rural areas after government hiked the price of fuel in the domestic market in late June.
The high non-food inflation pushed up point-to-point inflation in July at 10.82 per cent, a six-month high, they said.