There has been extensive damage to agricultural produce from the floods in the eastern parts of the country in mid-August. In this condition, import of goods should have increased than usual to meet this scarcity. But the traders have cut down on the import of daily essentials alleging the lack of a favourable trade environment. As a result the prices of daily essentials keep rising.

Traders involved with the import of goods say that on one hand the political situation of the country has caused a trade slump, while on the other hand, the price hike in the global market has put them at risk.

In this condition there are uncertainties in case of getting the investment back from importing goods at a higher price. So, despite there being demand they are not going for the import of daily commodities in an adequate amount.

According to National Board of Revenue (NBR) records, the import of daily essentials like edible oil, sugar and onion has dropped in the two months (August-September) after the fall of the Awami League Government. The prices of these commodities are also on the rise in the global market. As a result, there looms a risk of shortage for these commodities ahead if the supply does not increase.

The reduction in import has created a pressure on the supply of daily commodities, which in turn has increased the prices of commodities like flour, soybean oil, palm oil and onions.

According to the Trading Corporation of Bangladesh (TCB) records, the prices of these commodities have increased by 1 to 4.5 per cent in just one week.

The price of sugar has decreased by Tk 3 per kg from the duty tax being slashed, whereas duty worth more or less Tk 11 has been reduced per kg of sugar. Low supply of sugar is the main reason for this.

People’s cost of living had increased due to the price hike of daily commodities during the last government’s tenure.

The Awami League government fell in the face of student-people uprising on 5 August. Since then, the prices of daily commodities didn’t decrease, rather increased in the last two months under the rule of the interim government.

Reason for reducing import

spoke to five top and mid-level importers on the issue of the import going down. They stated that there is an impression of slump in trade because of the chaos in the beginning of the term of the interim government. They took time to observe the situation.

They are not receiving any guidelines from the government either in this changed situation. Besides, the issues regarding the application for letter of credit (LC) in importing consumer items has not been settled completely yet. As a result the supply of import-dependent goods is decreasing.

When asked about the reason for the decline in import, a representative of Bangladesh Vegetable Oil Refiners and Vanaspati Manufacturers Association, on condition of anonymity told that several letters have been sent to the relevant authorities of the government, including the adviser for finance and commerce ministry, from the organisation so far as the price of palm oil keeps increasing in the global market.

Lastly, a letter was sent to the adviser on 6 October. The letter highlighted the lack of progress on the matter of price adjustment as there has been price hike in the global market. That is why the traders are suffering from indecision in the case of opening LCs. But the traders have been discouraged to import for not receiving any guidelines from the government, it added.

Executive director of daily commodity importing company Seacom Group, Amirul Haque, told that before opening LCs to import a commodity, the traders calculate how much it will cost to import the good into the country and what’s the price of that in the local market.

The current price of daily commodities in the global market is higher compared to that in the local market. Meanwhile, the bank interest rate has increased as well. In this condition, a decline in investment in consumer items is normal.

NBR records show that the import of unrefined sugar, the raw material for sugar, has declined the most among all the daily essentials.

After the interim government took charge, a total of 200,000 tonnes of sugar was imported in August and September. The amount was 328,000 tonnes during the same time last year. That means, the import has declined by 37 per cent year on year.

The import of palm oil has decreased as well. Though the import of soybean oil increased a bit, the total import of both the edible oils is less compared to the demand.

As per NBR records, a total of 349,000 tonnes of these two types of edible oil have been imported in the last August and September. During the same time last year, the import was 376,000 tonnes. That means the import has seen a 7 per cent slump.

The demand of another daily essential, onion also has to be met through import.

As much as 94,000 tonnes of onion was imported in August and September, while the import was 230,000 tonnes at the same time last year. There has been a steep 59 per cent decline in the import of this.

However, the import of wheat has not declined though. A total of 1.75 million tonnes of wheat has been imported in the two months. Meanwhile, 1.7 million tonnes of wheat was imported at the same time last year. Among all the daily essentials, there has been a significant rise in the import of lentils.

A total of 119,000 tonnes of lentil has been imported in the last two months, the import of which was just 37,000 tonnes in the same time last year.

According to this record, the import of lentils has more than doubled this year. Basically, a major portion of the LCs for commodities that have been imported during the last two months had been opened earlier.

However, Meghna Group of Industries (MGI) chairman Mostafa Kamal told, “The import of daily essentials has declined a bit due to the demand being dropped.  Meanwhile, the main reason behind the decline in sugar import was the increase in smuggling of sugar. However, the smuggling has declined a little now. So, we are increasing the import again.”

Of the daily essentials, the price of palm oil has increased the most. According to TCB records, the price of loose palm oil was Tk 125-135 per litre before the fall of the Awami League government. It was sold at Tk 144-145 per litre this Saturday, an increase by Tk 10-19 per litre.

Among all the edible oils, palm oil is used the most. The hike in the price of this oil is augmenting the sufferings of the low income population. Plus, the cost of production for goods in the food industry is increasing as well.

Alongside palm oil, the price of soybean oil has also increased by Tk 7 per litre. Soybean oil sold for Tk 144-145 per litre on 4 August. After an increase of minimum Tk 1 to maximum 7, the price has now risen to Tk 152-156 per litre.

The price of onions was also somewhat stable. A kg of imported onion sold for Tk 100-105 on 4 August. However, the price of onions has also increased now. According to TCB, onions are selling for Tk 105-110 per kg now.

Meanwhile, TCB records show that the price of packaged flour has increased by 3.7 per cent within the difference of a week.

However the price of wheat flour remains the same as before. The price of sugar had increased by Tk 3 per kg. However, the price has decreased and stays stable at the same rate from 4 august due to the reduction in duty tax.

The government is adopting various steps to control the price of daily essentials. Lastly, the regulatory duty on sugar import has been reduced by 15 per cent. From that the duty tax on importing unrefined sugar will be reduced by Tk 11.18 per kg, stated the NBR.

There used to be a duty tax of Tk 38-42 on importing per kg of sugar. Now, the importers will have to pay Tk 27-31 only. The duty tax on edible oil had already been decreased before. Yet, a duty tax of Tk 17-18 has to be paid on per kg.

Researchers, however, have emphasised on increasing supply rather than reducing duty tax to keep the prices of import-dependent commodities under control. They believe the crisis won’t be diffused unless the supply increases.

Research director at CPD Khondaker Golam Moazzem told that the flood in August has damaged the crops. That has created a pressure on the internal production. The pressure on import goods will be increased as well. The shortage will widen if there’s a decrease in import under this condition.

It won’t be possible to handle the situation with market management like reducing duty tax alone. In addition to encouraging the private sector, the government has to take preparations for import as well. Otherwise there will remain the risk of a food crisis, he added.

Golam Moazzem believes the commerce, agriculture and food ministries should take joint steps by estimating the figures of production and demand. Then it will be possible to confirm what will be the amount of deficit and how that can be dealt with.

Business leaders at a roundtable here today called upon the interim government for restoring fully the law and order especially in the industrial belts, lowering interest rates and carrying out necessary reforms for ensuring smooth operations and sustainability of the industries.

They made the call at a roundtable on “Current State of the Economy and Outlook of Bangladesh” organized by the Dhaka Chamber of Commerce and Industry (DCCI) at the DCCI auditorium.

Speaking at the roundtable, Mir Nasir Hossain, former president of FBCCI, said that the recent labour unrest has shattered the country’s image in the global market.

He said that not only the export-oriented industries but also the domestic market-based industries are important.

Nasir said, the real effective rate of interest is too high in Bangladesh and it often hampers the entrepreneurs to compete with the international market.

Saying that reforms are badly needed in the NBR and customs houses, Nasir said, “Moreover, customs houses should be automated. Although the initiative has been taken few years back, but it is yet to see the light”.

He said although an affluent middle income group has grown up in recent past in the country, but in line with that, the tax net has not been widened, which is not desirable.

The former FBCCI chief said due to lack of uninterrupted gas supply, the manufacturing industries are suffering a lot. To resolve the crisis, he suggested for strengthening on-shore and off-shore gas exploration.

Syed Nasim Manzur, President of Leather Goods and Footwear Manufacturers & Exporters Association said that the businessmen now feel unsecured due to labour unrest and vandalism.

Declining the purchase capacity of people triggered by high inflation of money led to reduce public consumption of food and services remarkably, he noted.

Nasim said that the double-digit rate of interest on industrial loan is not viable for sustaining in the competitive market.

He said, FDI is needed for a country like Bangladesh, but due to low confidence, it remains stagnant now. He hoped that FDI will see a positive move within few days.

Calling for protection of RMG sector, Nasim Monzur said, “We’ve to save the RMG industry as it has a multiplier impact on our overall economic value chain”.

Mohammad Hatem, President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), said that a good understanding and relation between the owners, workers and labour leaders can mitigate any unrest as well as violence in the factories.

He also laid importance on giving industry owners adequate time to repay their loans requesting the Bangladesh Bank to take steps in this regard.

Dr. M. Masrur Reaz, Chairman & CEO, Policy Exchange Bangladesh said, the government could not take the right policy in right time which caused the macro-economic crisis in recent past.

“Confidence level of investors is shattered now, law and order especially disorder in the ‘order’ part, labour unrest, inflation are some of the pressing issues for the macroeconomic challenges for Bangladesh,” he said.

Reaz also said, “We’ve seen a commendable progress in the banking sector reforms recently, but in the other areas we’re yet to see the policy governance.”

“We’ve to keep our forex reserve stable through steady flow of remittance, export earning and FDI to restore confidence of the people,” he said.

Shams Mahmud, former President of DCCI & Managing Director of Shasha Denims Limited mentioned that the labor unrest in Ashulia region disrupts the production in the factories.

“If the law and order situation does not come into normalcy there, buyers’ confidence will be hampered and thus buyers’ order may shift from Bangladesh to other competitors,” he said.

Regarding NPL, he said for the mismanagement of banks, genuine businesses should not suffer in getting loans while the banks should also be accountable for any mismanagement.

Ahsan Khan Chowdhury, Chairman & Chief Executive Officer (CEO) of PRAN-RFL Group noted that Bangladesh is a land of opportunities and it could be one of the hub of global business for its immense potentials.

He said, the main task of the business community is to create employment, but sometimes, it causes setback due to labour unrest.

Laying importance on active role of police in marinating law and order, he said, “We want to see the police as it should be,…We want to see all law enforcing agencies back again with their full capacity.”

Ahsan also said that with the high rate of bank interest, it is difficult to sustain. “We should have a rewarding system for the good borrowers. There should not be any restriction on opening LCs to create employments and keep operational the wheels of industries.”

Syed Mohammad Kamal, Country Manager of Mastercard Bangladesh said, from July-August, digital spending has remarkably dropped down as consumption was in the downward trend.

He suggested incentivizing digital payment system over cash payment. At present the remitters get 2.5 percent incentive on their remittances sent to Bangladesh. If this facility is withdrawn, they will go for unofficial channel to send remittance to home that may affect foreign currency reserves, he observed.

Ambareen Reza, Co-Founder, Chairman & CEO of Foodpanda Bangladesh urged for low cost fund for the SMEs. She also said that number of loan defaulters in the CMSMEs or startups is very negligible.

DCCI President Ashraf Ahmed said, at present Bangladesh is experiencing an unstable economic growth trajectory with slow GDP growth, coupled with few other challenges.

Currency devaluation, rising inflation, financial instability, labour unrest, concerns over energy security and disruptions in key export industries are making the country’s economy unstable.

He suggested for immediate restoration of law-and-order situation as it required for the stability in the current business environment.

Ashraf also stressed on faster reforms in the banking governance and suggested to address NPL and liquidity shortage issues that must be prioritized to restore confidence in the financial system.

To combat inflation, he said, the government can pursue supply-side reforms to ensure smooth distribution of essential goods and services.

Diversification of the energy mix and new energy supply routes and improving investment in the energy sector are must for safeguarding the industrial productivity, he added.

The DCCI president suggested for planned housing, education and healthcare services in the Ashulia and adjacent areas to provide a low cost living facilities to the workers of that particular area.

DCCI Senior Vice President Malik Talha Ismail Bari was also present on the occasion.

An initiative has been taken to withdraw the upper ceiling on investment in wage earners development bonds for expatriate Bangladeshis. With this, the authorities aim to lure expatriate professionals and businesses to invest at home, clear ways for foreign investments, and increase inflow of remittances.

The expatriate welfare and overseas employment ministry issued a letter to Abdur Rahman, Khan, secretary of the internal resources division (IRD), on Wednesday, asking him to take action in this regard.

The wage earners development bond was introduced in 1981, with a maturity period of five years.

Asked about the issue, the IRD secretary declined to make any comment and claimed that he has not yet received any letter over the issue

According to the Wage Earners Development Bond Rules, 1981 (amended on 23 May, 2015), there was scope to invest any amount in the bond. However, during the Covid-19 outbreak, the IRD issued a notification on 3 December, 2020, imposing an investment limit of Tk 10 million (or its equivalent in foreign currency) on wage earners development bonds, US dollar premium bonds, and US dollar investment bonds.

The cap on US dollar premium bonds and US dollar investment bonds was lifted later on 4 April, 2022, allowing unlimited investments.

However, the investment limit for wage earners development bonds remains unchanged, with no provision for auto reinvestment. Hence, expatriates are being forced to withdraw their investments.

In its letter, the expatriate welfare ministry told the IRD secretary that the upper ceiling on investment should be abolished or relaxed to boost remittance inflows and attract more investment from expatriates.

On Tuesday, expatriate welfare and overseas employment adviser Asif Nazrul told the media that he proposed to cancel the ceiling of Tk 10 million on the purchase of wage earners development bonds.

“It needs the assistance of Bangladesh Bank, and I hope Bangladesh Bank will facilitate this,” he said, expressing optimism for more remittance in the coming days.

These bonds can be purchased from offshore and authorised dealer (AD) branches of Bangladesh Bank, exchange houses, exchange companies, and scheduled banks. Its profits are free from the tax net. Also, there are scopes to take loans against the bonds, and there is no requirement to have a foreign currency (FC) account to buy these bonds.

Foreign exchange earners themselves can invest in these bonds, or invest in the name of their nominee. Government employees who serve in Bangladesh missions abroad are also eligible to invest in Wage Earners Development Bonds.

It was learned that the IRD will present a summary of the proposal to finance and commerce adviser Salehuddin Ahmed for approval next week. Once it gets approval, the IRD will issue a notification, while the central bank and the national savings directorate will implement.

When asked about the matter at the secretariat on Thursday, adviser Salehuddin Ahmed told that the proposal should be submitted first before any further comments can be made.

He believes that if these measures succeed, inflation will decrease. This would be great achievement if people’s anger and suffering are alleviated.

Ahsan H Mansur made these remarks at a roundtable discussion organised by Prothom Alo titled “Where do we want to see the banking sector?”

Ahsan H Mansur said that three task forces are being formed for the reform of the banking sector. One task force has already been established, and several measures have been implemented, including changes to the boards of some banks.

To improve the situation, 10 to 11 weak banks are now under regular supervision, he said adding these banks report on 20 specific issues to Bangladesh Bank every day.

The central bank governor said, “After implementing these measures, deposits in banks have increased by Tk 80 billion. This is a great relief. Once the liquidity crisis is resolved, we will move on to the next steps.”

Ahsan H Mansur noted that if the current trend in the dollar market continues, there will no longer be instability in the market. For the first time, the exchange rate for remittances in dollars is higher than the rate in the open market. The dollar market is stabilising.

The governor said, “Reducing inflation is my primary responsibility. Various measures are being taken to achieve this. Monetary policy is already stringent, and steps are being taken to make it even stricter. While there may be temporary difficulties for businesses, inflation will decrease, ultimately benefiting the overall economy.”

Salehuddin, also the adviser to the interim government on the Ministry of Science and Technology, said that the board meeting of the EPB would be held soon where all things would be finalised.He informed that the EPB officials are working on finalising the export target and data reconciliation while all issues are likely to be approved there at the board meeting.

Salehuddin said that there was a gap between the export data of the Bangladesh Bank and the Automated System for Customs Data (ASYCUDA) of the NBR while the final data is being reconciled.On 3 July, the Bangladesh Bank (BB) released data of the Balance of Payments (BoP) for July-April period of fiscal year 2023-24. It used draft reconciled export data, which showed the country’s exports were nearly $14 billion below the figure reported earlier by the Export Promotion Bureau (EPB).

It showed that exports fell 6.8 percent during the July-April period although the EPB initially reported 3.93 per cent growth.Asked whether the reconciled export would put any impact on the GDP calculation, the Adviser said that the GDP calculation is usually based on production method where some 19 sectors are associated.

“So, hopefully, it will put no such impact on GDP …details can be informed later and you can also know about it later,” he added.Replying to another question on the possible government measures about the torn and dilapidated currency and bank notes especially denomination of Tk 10, Tk 5 and Tk 20, he said that it often happens as the countrymen quite often tend to mishandle their notes.

But, such mishandle of notes is not seen worldwide in case of the circulation of US Dollars, he cited.The former central bank governor said that he would raise the issue with the incumbent central bank Governor as old currency and bank notes could not be replaced right now unless the new notes are in place.

Responding to a question, he said that the present interim government has been acting promptly in various fronts as the provision for whitening black money has been repealed by the council of advisers recently.Besides, he said the central bank Governor has also been reconstituting various Boards of the banks to infuse dynamism in those.

Replying to another question, Salehuddin said the Planning Adviser would do all necessary things to revise the ADP where the ERD would extend all cooperation.He, however, said that the national budget would be revised and definitely be rationalized through annexing unnecessary expenditure.Asked whether such exercise would take place in this month or before the annual meetings of the World Bank and IMF Group, the Finance Adviser denied to make further comments.

Prime Minister Sheikh Hasina quit and fled to India last week after student-led protests against her spiralled into some of the worst violence since Bangladesh’s 1971 independence from Pakistan, killing 300 people and injuring thousands.

An interim government, led by Nobel Prize winning economist Muhammad Yunus, has been appointed to plug a power vacuum and hold elections, but the protests have widened to target officials appointed during Hasina’s term, including the central bank chief and four deputy governors, who have resigned. A new central bank governor has been appointed.

Bangladesh’s recovery from the currency crisis hinges on the ability of any replacement government to meet public concerns and reestablish social order

“We see risk of policy inaction and a potential slowdown in financial reforms,” S&P Global Ratings credit analyst Shinoy Varghese said.

Weakness in the banking industry, including a lack of liquidity, thin capital buffers and ailing asset quality, has worsened while the departure of senior central bank officials could delay ongoing structural reforms, the rating agency said.

The anti-government protests emerged from a movement in July against quotas in government jobs, as the $450-billion economy – the world’s fastest-growing just years earlier – struggled with youth unemployment, inflation and shrinking reserves.

These conditions drove Hasina’s government to seek a $4.7 billion bailout from the International Monetary Fund, which was approved in January 2023.

Workers stand while waiting for vegetables to transport at a wholesale market in Dhaka on 14 August 2024, days after a student-led uprising that ended the 15-year rule of Sheikh Hasina

Workers stand while waiting for vegetables to transport at a wholesale market in Dhaka on 14 August 2024, days after a student-led uprising that ended the 15-year rule of Sheikh HasinaAFP

Weeks of unrest have fanned inflation, which reached 11.66 per cent in July – when the government imposed a nationwide curfew, shutting down transport, offices and the mainstay garments industry for days – from 9.72 per cent the previous month, according to official data.

Moody’s Analytics said last week it has provisionally revised Bangladesh’s GDP growth forecast for this year to 5.1 per cent from 5.4 per cent previously.

“Bangladesh’s recovery from the currency crisis hinges on the ability of any replacement government to meet public concerns and reestablish social order,” it said in a note.

The Asian Development Bank, a key development partner for Bangladesh, said it would work with the interim government towards macroeconomic and fiscal sustainability.

“A second priority is the expansion of private sector development to enhance competitiveness and create new employment opportunities,” the ADB said in a statement.

“This includes working with the interim government to streamline government-to-business services to reduce the cost of doing business in Bangladesh.”

Bangladesh has registered a minimal decline in inflation as it recorded an overall inflation of 9.72 per cent in June, slightly down from 9.89 per cent in May.

Food inflation also maintained a similar trend as it declined to 10.42 per cent in June, from 10.76 per cent in May, according to the latest inflation updates of the Bangladesh Bureau of Statistics (BBS).

A 9.72 per cent inflation means consumers had to spend Tk 109.72 to purchase a product this June, which used to cost them Tk 100 in June last year.

It indicates the cost of living has increased proportionately, and subsequent hardships of the people, particularly the low and limited income groups.

Non-food inflation also eased slightly to 9.15 per cent in June, from 9.19 per cent in May.

Bangladesh has been experiencing high inflation rates over the threshold of 9 per cent for the past two years. Efforts to keep it in check remained unsuccessful, except for slight fluctuations.

Economists believe that high inflation is now one of the major challenges for the economy.

According to experts, inflation is a form of tax that impacts people from all walks of life. When inflation outpaces income growth, the purchasing power of poor and middle-income families diminishes to a significant extent, making it tough for them to sustain their livelihoods.

Some experts even believe the actual inflation to be higher than the BBS estimation.

Meanwhile, the government has planned to bring down inflation to 6.5 per cent within the fiscal year 2024-25.

In his budget speech at the parliament last month, finance minister Abul Hassan Mahmood Ali said, “We are expecting that the inflation rate will come down to 6.5 per cent in the next fiscal year as an outcome of the policy strategies that we have adopted.”

He noted that the government adopted a series of contractionary monetary policies, aligning with global trends. The central bank has significantly increased interest rates, with the policy interest rate now at 8.5 per cent, the Standing Lending Facility (SLF) rate at 10 per cent, and the Standing Deposit Facility (SDF) rate at 7 per cent.

Besides, the Six Months Treasury Bill based Interest Rate Determination System (SMART) has been abolished and made a market-based system. Under the new system, loan demand and interest rates will be determined by credit supply and the relationships between bankers and customers.

These monetary measures are part of a broader strategy to curb inflation, which has been affecting the economy and the common people.

The government has also implemented supportive policies. Programmes like the Family Card and Open Market Sales (OMS) are being bolstered to mitigate the adverse effects of inflation on vulnerable populations.The government is optimistic that these combined policy strategies will reduce the inflation rate to 6.5 per cent in the current fiscal year.

According to a Bangladesh Bank report, the banks approved loans and investments in the recent months, which significantly exceeded the amount they received as deposits. In the aftermath, they witnessed their current account deficit to swell significantly.

The central bank is providing collateral-free loans to these banks under special considerations, enabling them to continue their loan and investments.However, there are allegations that the banking sector regulator is not monitoring the banks properly even after lending special cash assistance, which eventually lingering the crisis.

The scenario was revealed during conversations with officials of the concerned banks, in addition to analysing the recent central bank report.

A total of 10 Shariah-based banks are now in operation in Bangladesh, while six of them are suffering from acute cash crisis. The banks are – Islami Bank Bangladesh Limited (IBBL), Social Islami Bank (SIBL), First Security Islami Bank (FSIBL), Global Islami Bank (GIBL), Union Bank, and ICB Islamic Bank.

The central bank reported that the 10 banks maintained a combined deposit of Tk 4038.5 billion till December last year, but the amount dropped  by Tk 43.01 billion to Tk 3995.49 billion in March.

On the flip side, their loan disbursements rose by Tk 107.52 billion during the period, from Tk 4146.8 billion recorded in December to Tk 4254.32 billion in March.

The Shariah-based banks are required to maintain an advance-deposit ratio (ADR) of 92 per cent, but their ADR was recorded at 96 per cent in December last year, while it rose to 99 per cent in March this year.  Besides, the banks recorded a steep fall – Tk 50.43 billion – in excess liquidity, from Tk 56.47 billion to Tk 6.05 billion.

The central bank disbursed Tk 220 billion in special loans to seven banks, including five Shariah-based ones, on the last working day of the previous year, to help them appear with better financial health.

Thanks to this infusion, the banks showed handsome amounts in surplus liquidity in their financial statement at the end of the last year, which impacted the entire Shariah-based banking system. The same policy was followed in the preceding year too.

Two officials from Shahjalal and Exim Bank, requesting to remain unnamed, told Economist that the five Shariah-based banks kept their aggressive loan distribution unchecked despite their liquidity crisis. Since they do not have enough deposits, they are now providing loans with the borrowings from the central bank.

They alleged that such aggressive loan disbursal is tarnishing images of all Shariah-based banks. Officials of Al-Arafah Islami Bank and Standard Bank also echoed the concerns.

It was learnt that the crisis-hit banks have long been failing to maintain the required level of cash reserve ratio (CRR) and statutory liquidity ratio (SLR) at the central bank.

A separate report from Bangladesh Bank revealed a combined deficit of Tk 164.39 billion in the current accounts of the five troubled banks as of May this year.

Among them, the First Security Islami Bank has Tk 89.35 billion in current account deficit, while Tk 21.27 billion in Islami Bank, Tk 30.89 billion in Social Islami Bank, Tk 20.61 billion in Union Bank, and Tk 2.27 billion in Global Islami Bank.

The managing directors of the troubled banks could not be reached over the phone despite repeated calls.

Despite the financial woes, the Shariah-based banks continued to recruit fresh manpower, with those rooted in Chattogram in priority. These banks had a total workforce of 48,883 at the end of December, and it rose to 49,742 in March this year.

Bangladesh last exports a ship when Ananda Shipyard and Slipways in Narayanganj hands over an ocean-going ship to Enzian Shipping in the UK in September 2022.Collected

Two local companies exported ocean-going ships one and a half decades ago, opening a new window for Bangladesh in ship export, but that potential has waned gradually as no ocean-going ship was exported over the past 20 months while only three ships were exported in the last five years.

According to data from the National Board of Revenue, lastly, Ananda Shipyard and Slipways Ltd in Narayanganj exported an ocean-going ship to Enzian Shipping in the UK in September 2022 and the vessel has been registered with Antigua and Barbuda while Western Marine Shipyard Limited in Chattogram exported no ships since January 2020.

Entrepreneurs said Bangladesh started taking the toll since the shipbuilding industry slowdown in 2011 when foreign buyers cancelled a number of export orders. The next impact came after the coronavirus pandemic and the Russia-Ukraine war. Since then entrepreneurship could not recoup the damages. While loans from two ship-exporting companies Ananda Shipyard and Slipways and Western Marine Shipyard turned irregular. However, most of their loans have been regularised under a special policy facility recently and a process is underway to regularise the remaining loans.

Entrepreneurs also said they are now receiving new export orders, and countries also saw a rise in demand for various types of ships and water vehicles. So, they are trying to revive their business once again.

Ananda Shipyard and Slipways executive director Tarikul Islam said, “We lagged in the shipbuilding industry sector due to the cancellation of export orders during the global economic slowdown. However, demand for small ships also grew in global markets; foreign buyers are also visiting the shipyards. We expect new export order will come. There is also local demand along with exports. Altogether, we expect this sector will revive again.”

Ananda Shipyard was the first company to export a ship from Bangladesh when they handed over the container carrier MV Stella Maris to a Danish buyer on 14 September 2008 at a price of Tk 674.9 million. The company also exported a ferry to Mozambique in 2006.

Western Marine Shipyard joined Ananda Shipyard in 2010 when the former exported an ocean-going ship to Germany on 30 November of that year at a price of 1.23 billion.

According to sources at NBR and entrepreneurs, Bangladesh has exported 45 ships and water vehicles since 2006, and 19 of those were ocean-going ships while the remaining ones were ferries and other types of vessels. Earrings from these exports were about Tk 15 billion.

Western Marine Shipyard led in exporting ships and water vehicles with 15 ocean-going ships and 18 different types of vessels being sent to 11 countries, while Ananda Shipyard exported four ocean-going ships and eight vessels.

Only two companies in the scene

According to data from export-oriented shipbuilding companies’ organisation Association of Export Oriented Shipbuilding Industry of Bangladesh (AEOSIB), there are currently 10 oriented shipbuilding companies in the country, but none of them have exported vessels yet except for two companies. FMC Dockyard in Chattogram is trying to export ships and vessels, but they are yet to succeed.

Local conglomerates, however, invested in this sector. Conglomerates like Meghana Group, City Group, Bashundhara Group, TK Group and Seacom Group jointly invented to build Delta Shipyard. They have yet to make an export but build ships with international standards. They mainly build ships at their shipyards to ferry their goods.

Export orders coming again

Ananda Shipyard received the work order on the ship that they exported in 2022 before the global shipbuilding industry slowdown began. They will also export three more ships from that word order and work on shipbuilding has already started. They are also trying to secure new export orders.

Western Marine Shipyard received export orders on a total of seven small-sized ships including oil tanker, tub boat and landing craft from the United Arab Emirates in July last year and February this year.

Entrepreneurs said shipbuilders in Bangladesh mainly build small vessels. Currently, there is good demand for these ships globally.

Western Marine Shipyard managing director Captain Sohel Hasan this sector has been stagnant for a long due to the global economic slump, but there has been a huge demand for ship export at global markets.

“If we can catch this opportunity, then good days in ship export will return, and for this, government assistance and bank support is necessary,” he added.

The state-owned group is tasked with importing LNG for Bangladesh, which relies on the fuel to meet power demand for its population of more than 170 million people.

Summit LNG, the operator of the damaged terminal, told Petrobangla that it had declared force majeure on LNG deliveries after its terminal was damaged, one of the sources added.

In late May, Summit LNG paused operations at its floating storage and regasification unit (FSRU) in Moheshkhali after it was significantly damaged during a cyclone.

The company later said the FSRU, which acts as a floating terminal, would proceed to Singapore or the Middle East for repairs, and that it hoped it could return to Bangladesh within three weeks of those being completed.

Due to Summit’s terminal outage, Petrobangla cancelled four spot cargoes scheduled for delivery from late May to around mid-June, a senior Petrobangla official said on Tuesday.

Three of the spot cargoes were set to be delivered by Gunvor in late May and between 7 and 11, and the fourth by QatarEnergy between 19 June and 21 June, added the official.

Summit LNG and QatarEnergy did not immediately respond to a request for comment on a public holiday in Bangladesh and Qatar. Gunvor declined to comment.

Summit’s FSRU is one of Bangladesh’s two floating LNG import terminals, with a regasification capacity of 500 million cubic feet per day, that supplies gas to the national grid. It began commercial operations in April 2019.

Summit had entered a 15-year charter agreement with U.S.-based Excelerate Energy in 2017 for the FSRU. Excelerate Energy said in a statement on Tuesday night that the FSRU began its journey to a Southeast Asian shipyard facility for repairs on June 12, and is committed to returning it to service in Bangladesh by end-July.LSEG data showed the FSRU is estimated to arrive in Singapore on June 19.

Bangladesh has seen annual LNG imports increase, and last year shipped in 5.2 million metric tons of the fuel, according to data from analytics firm Kpler.

It has imported 2.6 million metric tons of LNG so far this year, with May shipment volumes reaching an all-time monthly record of 600,000 metric tons.