Import payments grow by 23pc in four months

Siddique Islam The country's overall import payments grew by nearly 23 per cent in the first four months of the current fiscal year (FY), mainly due to an increase in import bills for intermediate goods and fuel oil, officials have said. "The overall import payments increased significantly thanks to the higher imports of petroleum products and intermediate goods during the period under review," a senior official at the Bangladesh Bank (BB) told the FE Sunday. Letters of credit (LCs) against imports worth US$ 11.75 billion were settled during July-October of FY `12 compared to those valued at $9.56 billion in the corresponding period last fiscal, according to the central bank statistics. The BB official expects that the pressure on import payments will ease in the coming months as import orders have already started declining from the month of November. Opening of fresh LCs against imports, generally known as import orders, fell by 10.31 per cent in November over that of the previous month of the current calendar year, the BB data showed. "The declining trend in import orders has continued in December this year due mainly to lower imports of food grains," the central bank official said. Bangladesh Taka (BDT) depreciated by 7.48 per cent against the US dollar during the period under review following an increased demand of the greenback for settlement of import payment bills by the commercial banks. The exchange rate of the US dollar against BDT rose to Tk 75.72 during the period of the FY 12 from Tk 70.45 in the same period the previous fiscal, the official data showed. Import of intermediate goods like coal, scrap vessels, hard coke and clinker has increased by 94.50 per cent to $1.0 billion during the period from $514.50 million in the corresponding period in the previous fiscal. "Higher import of scrap vessels has contributed to raising the import of intermediate goods sharply," another BB official said. The import of scrap vessels rose to $381.86 million during the period from only $14.65 million in the corresponding period of the previous fiscal. The import of fuel oils increased by 82.53 per cent to $1.68 billion in the first four months of FY `12 from $924.42 million in the same period of the FY `11, the central bank said. "The actual import of other essential items including industrial raw materials and capital machinery also increased significantly during the period to meet the domestic demand," the BB official noted. He also said fresh opening of LCs for capital machinery import decreased drastically during the period as placing of import orders for different types of capital machinery, including rental power plants, has declined recently. The import orders for capital machinery declined by nearly 34 per cent to $727.15 million during the period from $1.09 billion in the corresponding period the pervious fiscal. However, actual import of capital machinery -- industrial equipment used for production --- rose by 34.62 per cent to $821.27 million during the period against $610.04 million in the corresponding period of FY `11. Food imports fell during the period under review as the country has built enough stocks for the main staple rice after a bumper Boro crop yield in May this year, the BB official said, adding that such a trend may continue in the coming months. The BB figures show that import of food grains such as rice fell by 11.15 per cent to $428.10 million in the first four months in the FY `12 over the same period last fiscal. Industrial raw material imports increased by 18.68 per cent to $4.37 billion during the period under review from $3.68 billion of the corresponding period in the pervious fiscal. During the period, the import of machinery for miscellaneous industries witnessed an 18.68 per cent growth to $998.52 million compared to that of $841.34 million in the same period the previous fiscal.