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Bangladesh sees an import surge as apparel exporters made big purchases of textile products as capital goods from the international market to meet buyers' enhanced requirements after the reopening of economies in the western world.
A rising trend in fuel-oil prices on the global market following restoration of connectivity gradually across the world despite the ongoing Covid-19 pandemic has also pushed up overall import-payment obligations, market operators said.
The settlement of letters of credit (LC), generally known as actual import, in terms of value, ballooned by 30.62 per cent to $5.17 billion in August 2021 from $3.96 billion in the previous month, according to the central bank's latest statistics.
On the other hand, the opening of LCs, generally known as import orders, rose more than 48 per cent to $6.29 billion in August from $4.25 billion a month before.
BB officials as well as the market operators predicted that the rising trend in import-payment obligation would continue in the coming months.
"Our economy is opening gradually with the enhancing of vaccine coverage and lower infection of coronavirus," a BB senior official told the FE Wednesday while explaining the latest import situation.
He also said global economic-growth momentum also continues with commodity- price hike that creates inflationary pressure across the world.
Higher imports of food-grains also pushed up the overall import expenses of Bangladesh, according to the central banker.
Imports under back-to-back LC settlement of textile products jumped more than 42 per cent to $694.42 million in the month of August from $488.95 million in July 2021, the Bangladesh Bank (BB) data showed.
Talking to the FE, Mohammad Hatem, first vice president of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said imports of apparel-making products increased significantly during the period under review for execution of the buyers' orders.
"Export orders in the apparel and clothing sector have increased around 20 per cent recently," Mr Hatem said, predicting that such orders may increase further if the government adopts proper policy.
Higher prices of cotton on the domestic market have forced local apparel entrepreneurs to enhance imports from the global market, he explained.
Actual imports for petroleum products jumped by nearly 57 per cent to $325.62 million in August from $207.85 million in July 2020, according to the central bank data.
The demand for fuel oils has been rising in recent months as economies around the world have started reopening, the market operators said.
Fuel-oil prices crossed $80 a barrel on Tuesday, hitting their highest level in three years, according to media reports.
Brent crude, the international benchmark for petroleum market, rose to as much as $80.69 on the day--the most since October 2018.
"Import expense for petroleum products has increased significantly following the rising trend in the crude-oil prices on the global market," a senior official of the state-run Bangladesh Petroleum Corporation (BPC) told the FE.
He also said the import-payment obligation for fuel oils is likely to increase further in the coming months mainly due to seasonal impact.
Meanwhile, investment bank Goldman Sachs said Brent could hit $90 per barrel by the end of the year, warning that rising input costs, higher gas prices and weaker growth were likely to weigh on European corporate profit growth for 2021.