Pre-Ramadan food imports much higher this year

Food imports from India have marked a significant increase in June, a month before Ramadan, compared to the same period last year, Bangladesh Bank figures showed.   Usually, the Ramadan consumption spree leads to larger amounts of food import from the neighbouring country, but this year the figures are much higher.   Sugar, edible oil, dates, pulses, onion and ginger were on the increased imports list during the month.   According to the central bank’s June figures, sugar import increased to $49.15m from $18.29m last year, crude edible oil to $68m from $51m, dates to $2.6m from $560,000, pulses to nearly $61m from $26m, onion to $10m from $6m and ginger to $4.6m from $1.8m.   Economists say the higher amounts of food import suggest the remarkable increase in consumption, which signals an even wider trade gap with India to happen.   Bangladesh has been suffering from a long-time big trade deficit with the giant nation. The trade gap with India is currently over $4bn, according to Bangladesh Bank and Export Promotion Bureau data.   “Food import from India is the major contributor to Bangladesh’s large trade deficit with the country,” said Dr Mustafa K Mujeri, director general of Bangladesh Institute of Development Studies (BIDS).    Bangladesh Bank data shows the opening of letters of credit in June was 31% more than the same month last year. In June 2012, the growth of LC opening was much smaller at 12%.    The total import bills payment in June stood at nearly $3bn while the figure was $2.3bn a year ago. In 2011, the month’s import bills amounted to $2.6bn.   “But this is a temporary hike of import in Ramadan which will not affect the yearly trade deficit,” said Dr Mirza Azizul Islam, a former finance adviser to last caretaker government.        Bangladesh Bank data showed there was an overall decline in import in last fiscal except for the pre-Ramdan month June’s big jump.   According to the data, Bangladesh’s total trade deficit in July-April period of last fiscal stood at $5.5bn compared to $7.5bn a year earlier, showing 36% fall.   The government thinks reduction of import duties on food items is encouraging the traders to import more from the neighbouring country, contributing to widening of trade gap.   “Pressures from different sections force us to relax import rules, especially during Ramadan,” Commerce Secretary Mahbub Hossain told the Dhaka Tribune. He said duties on green chilli import from India were cut to stabilise the local market while the Hilsa export is currently banned, helping to widen the deficit.