Private sector's reluctance may force govt to import essentials
Tuesday, 18 November 2008
Shakhawat Hossain
Falling prices of commodities in the global market coupled with reduced import activities by private sector might force the government to take the role of importer and maintain smooth supply of essential items in the domestic market, officials said Monday.
"We have to take the initiative of importing essential commodities through the government machinery in the wake of slump in private import activities," said Commerce Secretary Feroj Ahmed.
He, however, said such import will be transitory with the main aim to overcome the recent crisis and the lack of confidence among the local importers.
"We had confidence in our importers in the past and do still have confidence in them," he said adding that the importers are shaky due to risk factor amid fall in commodity prices in the global market.
Not only importers but also the commercial banks have been panicked by the prevailing situation that, he felt, would not last long.
The opening of fresh letters of credit (LCs) against imports fell by over 43 per cent in October over that of the previous month because of substantial drop 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, said a senior official of the central bank.
One of the major responsibilities of the commerce ministry is to look after the price situation of essentials in the local market. Its main worry is now about edible oil, wheat and pulses the import of which has fallen drastically.
"The unusual slump in import business might disrupt the supply of certain products like edible oil, pulses and wheat in the local market after December," said the commerce secretary.
He said the quantities of these products, already imported or in the pipeline, are enough to meet the local demand until the end of the next month.
On being asked by the commerce ministry the Bangladesh Bank has already relaxed some conditions for import of these products to encourage the businesses to continue their import activities.
The commerce secretary said the main aim of his ministry now is to keep the market situation stable. In the past the ministry had to involve itself in import-related activities to cool down the prices of essential commodities in the local market.
"But now it has to undertake a similar course against the backdrop of the cooling global commodity market," he said.
The commerce secretary, however, said there were some drawbacks in the approval and tender process which hampered speedy government import in the past.
Falling prices of commodities in the global market coupled with reduced import activities by private sector might force the government to take the role of importer and maintain smooth supply of essential items in the domestic market, officials said Monday.
"We have to take the initiative of importing essential commodities through the government machinery in the wake of slump in private import activities," said Commerce Secretary Feroj Ahmed.
He, however, said such import will be transitory with the main aim to overcome the recent crisis and the lack of confidence among the local importers.
"We had confidence in our importers in the past and do still have confidence in them," he said adding that the importers are shaky due to risk factor amid fall in commodity prices in the global market.
Not only importers but also the commercial banks have been panicked by the prevailing situation that, he felt, would not last long.
The opening of fresh letters of credit (LCs) against imports fell by over 43 per cent in October over that of the previous month because of substantial drop 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, said a senior official of the central bank.
One of the major responsibilities of the commerce ministry is to look after the price situation of essentials in the local market. Its main worry is now about edible oil, wheat and pulses the import of which has fallen drastically.
"The unusual slump in import business might disrupt the supply of certain products like edible oil, pulses and wheat in the local market after December," said the commerce secretary.
He said the quantities of these products, already imported or in the pipeline, are enough to meet the local demand until the end of the next month.
On being asked by the commerce ministry the Bangladesh Bank has already relaxed some conditions for import of these products to encourage the businesses to continue their import activities.
The commerce secretary said the main aim of his ministry now is to keep the market situation stable. In the past the ministry had to involve itself in import-related activities to cool down the prices of essential commodities in the local market.
"But now it has to undertake a similar course against the backdrop of the cooling global commodity market," he said.
The commerce secretary, however, said there were some drawbacks in the approval and tender process which hampered speedy government import in the past.