Opening of import LCs falls drastically in Oct
Wednesday, 12 November 2008
Siddique Islam
The opening of fresh letters of credit (LCs) against imports drastically fell by over 43 per cent in October over that of the previous month because of substantial erosion in prices of commodities in the global market.
Import LCs worth US$1.341 billion were opened in October last as against $2.357 billion in the previous month, according to central bank statistics.
"The opening of LCs against imports has fallen significantly mainly due to declining trend in the prices of commodities in the international market," a senior official of the Bangladesh Bank (BB) told the FE Tuesday.
He also said the declining trend in opening of LCs continued until the first week of this month.
Import LCs worth $327.82 million were opened in the first week of November against $530 million of the corresponding period of the previous year, the BB's data showed.
The opening of LCs for import of some essential items, including rice, wheat, sugar, edible oils and pulses declined in terms of both value and quantity with the falling trend in prices of the commodities in the international market persisting, officials said.
During the period, opening of LCs for rice dropped by $155.93 million to $0.03 million in terms of value while LCs for wheat declined by $18.32 million to $49.67 million, sugar by $19.40 million to $1.03 million, edible oil by $6.95 million to $61.59 million and pulses by $7.26 million to $2.24 million.
"Opening of LCs for rice was very insignificant during the period due to seasonal impact as well as falling trend in prices of cereals in the global market," another BB official said.
On the other hand, opening of LCs for wheat import fell by 16,000 tonnes to 167,000 tonnes in terms of quantity. For sugar it dropped by 57, 000 tonnes to 3,000 tonnes and pulses by 11,000 tonnes to 3,000 tonnes during the period.
The opening of LCs for edible oil, however, increased by 10,000 tonnes during the period under review.
"Most of the importers are now maintaining a 'go-slow strategy' to avoid any financial risks and moreover there is sufficient stock of the commodities for the time being. As a result, the opening of LCs particularly for essential items has been drastically falling in recent days," a senior official of a private commercial bank told the FE.
He also said some influential business houses are clearing their previous stock of essential commodities that were imported when the international market was high.
"The importers are now reviewing the local market stock and price situation before opening of fresh LCs for essential items," the bank official observed.
The opening of fresh letters of credit (LCs) against imports drastically fell by over 43 per cent in October over that of the previous month because of substantial erosion in prices of commodities in the global market.
Import LCs worth US$1.341 billion were opened in October last as against $2.357 billion in the previous month, according to central bank statistics.
"The opening of LCs against imports has fallen significantly mainly due to declining trend in the prices of commodities in the international market," a senior official of the Bangladesh Bank (BB) told the FE Tuesday.
He also said the declining trend in opening of LCs continued until the first week of this month.
Import LCs worth $327.82 million were opened in the first week of November against $530 million of the corresponding period of the previous year, the BB's data showed.
The opening of LCs for import of some essential items, including rice, wheat, sugar, edible oils and pulses declined in terms of both value and quantity with the falling trend in prices of the commodities in the international market persisting, officials said.
During the period, opening of LCs for rice dropped by $155.93 million to $0.03 million in terms of value while LCs for wheat declined by $18.32 million to $49.67 million, sugar by $19.40 million to $1.03 million, edible oil by $6.95 million to $61.59 million and pulses by $7.26 million to $2.24 million.
"Opening of LCs for rice was very insignificant during the period due to seasonal impact as well as falling trend in prices of cereals in the global market," another BB official said.
On the other hand, opening of LCs for wheat import fell by 16,000 tonnes to 167,000 tonnes in terms of quantity. For sugar it dropped by 57, 000 tonnes to 3,000 tonnes and pulses by 11,000 tonnes to 3,000 tonnes during the period.
The opening of LCs for edible oil, however, increased by 10,000 tonnes during the period under review.
"Most of the importers are now maintaining a 'go-slow strategy' to avoid any financial risks and moreover there is sufficient stock of the commodities for the time being. As a result, the opening of LCs particularly for essential items has been drastically falling in recent days," a senior official of a private commercial bank told the FE.
He also said some influential business houses are clearing their previous stock of essential commodities that were imported when the international market was high.
"The importers are now reviewing the local market stock and price situation before opening of fresh LCs for essential items," the bank official observed.