The country's fruit importers have sought relaxation of the required 100 per cent letter of credit (LC) margin for importing fresh fruits and dates to help ensure their smooth supply, especially during the upcoming fasting month of Ramadan.
They have also urged the government to take necessary steps so that importers are able to open LCs based on the bank-customer relations for importing fresh fruits and dates.
Bangladesh Fresh Fruits Importer Association (BFFIA) has recently made an appeal to the Ministry of Commerce to this effect.
An official of the Ministry of Commerce (MOC) said: "We have received a request letter from the BFFIA and forwarded it to the Bangladesh Bank for take the next course of steps in this connection."
The official further said the association has urged authorities to relax the existing 100 per cent cash margin requirement for opening L/Cs to import fresh fruits and dates.
The association in its letter also expressed its fear that such provision could disrupt supply of imported fruits and push up their prices also ahead of Ramadan. According to the association, relaxation of the LC margin would help encourage traders to import increased volumes of fruits, thus promoting competition in the market and helping keep their prices at affordable prices.
The members of the association import fruits and dates from various countries through different commercial banks, it said.
But, the mandatory 100 per cent margin provision for open import L/Cs has made it difficult for most importers to continue their business, resulting in a reduction of fruit import in the country, according to the BFFIA.
The association noted that although the government has taken such steps to help keep the banking sector stable through improving the country's foreign exchange, there is no positive outcome from it due mainly to the stringent LC margin requirement.
"While banks are now opening L/Cs, arranging 100 per cent margin is not feasible for most importers," the association mentioned.
Usually, the demand for fresh fruits and dates rises sharply during the Holy month of Ramadan.
With the limited supply of locally-grown fruits during the holy month, Bangladesh relies heavily on imported varieties, it said.
Dates are considered as an essential item for iftar, while fresh fruits play a vital role in helping fasting people regain energy and meet nutritional needs, according to the association.
It also warned that if the existing margin policy is not relaxed, it could create an artificial shortage of fruits and dates during Ramadan, thus causing volatility in the market.
The annual demand for dates in Bangladesh is around 0.11 million tonnes, of which 50,000 to 60,000 tonnes of dates are required only for the month of Ramadan. In recent years, the import volume of dates has decreased, it was learnt.
Generally, traders import dates from the KSA, UAE, Egypt, Tunisia, Jordan, Iraq, Iran and Pakistan.
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