Originally posted in The Business Post on 4 August 2022
Consumer goods imports saw sharp rise in FY22
Due to the Russia-Ukraine war, Bangladesh saw a 39 per cent hike in import payments for consumer goods in the last financial year of FY2021-22, compared to the previous fiscal year of FY2020-21.
The situation is the same for most of the countries around the world as the war has pushed the prices of such goods up in the international markets.
Even though Bangladesh has recently taken austerity measures to ensure less consumption of electricity due to the rising prices of petroleum goods, Bangladesh Bank (BB) data shows that import payment of such goods had declined 11 per cent in FY22, compared to the year earlier.
The data was disclosed in a report, titled “Commodity-Wise Import Statistics Recorded by Customs,” released by BB on Monday.
It showed that Bangladesh spent a total of $5.78 billion to import consumer goods in FY22, which was 39.1 per cent higher than $4.15 billion in FY21.
In FY22, in the consumer goods chapter, the country mostly spent money to import edible oil and sugar. It paid $2.89 billion for these, which was 50.2 per cent higher than $1.93 billion in FY21.
Spending on milk and cream imports also increased 21.6 per cent to $418 million in FY22. However, the spice import payment declined 10.2 per cent to $363 million, compared to FY21.
Talking to The Business Post, Centre for Policy Dialogue (CPD) Research Director Dr Khondaker Golam Moazzem said that the main reason behind the rise in import costs of consumer goods was the Russia-Ukraine war.
“The other reasons are increased transportation costs and a hiked duty on non-essential goods,” he added.
According to BB data, overall petroleum goods import payment declined 11 per cent to $7.99 billion in FY22, compared to $8.98 billion in FY21.
Of those, crude petroleum import costs declined 11 per cent to $936 million in FY22, compared to FY21. The import cost of petroleum, oil, and lubricants increased around 11 per cent to $7.06 billion.
Reached for comment, a senior official of Bangladesh Petroleum Corporation (BPC) told The Business Post that the price of fuel oil has been increasing since March due to the war, which started in February.
“Although it has slightly declined now, BPC is still losing Tk 100 crore daily on average. I don’t know why the increase in import costs is not reflected in the central bank’s figures,” said the official.
Moazzem said there could be three reasons behind the relatively low fuel costs. “Bangladesh gets some advantage due to long term import agreement for fuel purchase, processed fuel import has increased and direct diesel import from India has started.”
Meanwhile, import payment of intermediate goods, excluding petroleum and RMG goods, increased 63.6 per cent to $24.94 billion in FY22, compared to FY21.
Of those, import costs of fertilizer and pharmaceutical products increased 223 per cent to $4.39 billion and 308 per cent to $1.48 billion, respectively, in FY22 compared to FY21.
Even though the Covid-19 pandemic affected new investment and existing investment expansion plans in Bangladesh, the capital goods import payment increased 26.3 per cent to $16.43 billion in FY22.
Of those, capital machinery import cost was $5.46 billion and other capital goods import cost was $10.97 billion, recording 43 and 19 per cent increases, respectively, compared to FY21. Regarding this, CPD Research Director Moazzem said since exports are increasing, the import of capital goods is also increasing. The import of capital equipment for various major government projects is also increasing.