Bangladesh’s import orders dropped by nearly 20 per cent or US$713.01 million in August last due to lower demand particularly for apparel and clothing because of the ongoing Covid-19 pandemic.
Opening of letters of credit (LCs), generally known as import orders, came down to $2.88 billion in August from $3.59 billion a month ago, according to the central bank’s latest data.
On the other hand, the settlement of LCs, generally known as actual import, in terms of value, fell by more than 4.0 per cent to $3.13 billion in August from $3.27 billion in the previous month.
“The country’s overall imports have maintained a falling trend in recent months mainly due to unexpected lower global economic recovery from the pandemic,” a senior official of the Bangladesh Bank (BB) told the FE.
He also said the overall economic activities are improving gradually in Bangladesh but this improvement may depend on the global economic recovery.
After analyzing the data for the last six months, it was found that the falling trend in imports started in April this year following the spread of coronavirus in different parts of Bangladesh.
Imports increased in June just after reopening of the overall business activities across the country but the declining trend in imports started again from July 2020.
Bangladesh’s overall economic activities remained almost halted during the 66-day coronavirus shutdown that started from March 26. And it was lifted on May 31.
Quoting the figures of the first two weeks of this month, another BB official said overall imports are expected to increase by the end of this month.
Echoing the BB official, Md Abdul Halim Chowdhury, managing director and chief executive officer of Pubali Bank Limited, said businessmen have already started discussion on receiving fresh loans for boosting their businesses.
“We expect that overall imports along with loans and advances would rise by the end of September,” the senior banker predicted.
Talking to the FE, Fazlul Hoque, former president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said fewer working days pushed down import orders particularly apparel and clothing sector slightly in August.
“We’ve celebrated as well as observed different occasions in the month of August,” Mr. Hoque, also managing director of Plummy Fashions, explained.
Opening of LCs for back-to-back import of ready-made garment (RMG) products dropped by nearly 21 per cent to $371.32 million in the month of August from $469.49 million in July 2020, the BB data showed.
Besides, import orders for raw cotton fell by more than 15 per cent to $137.55 million in August last from $162.10 million a month before.
“We’ve already received orders substantially from the global buyers particularly from the European Union member countries,” Sayeed Ahmad Chowdhury, general manager of Square Denims, told the FE while explaining the latest situation on the apparel and clothing sector.
He also said back-to-back import for RMG products will increase in the coming months for implementation of such orders.