Originally posted in The Daily Star on 31 July 2023
TRADE THRU CHATTOGRAM PORT
25 products dominated imports in FY23
As most of them are essentials, experts call for increasing local production
About half the imports through Chattogram port during fiscal year (FY) 2022-23 were made up of just 25 products that have industrial or household applications, according to data of the Chattogram Custom House.
Roughly 88.5 million tonnes of goods worth Tk 4.62 lakh crore were imported through the country’s premier seaport in the previous fiscal year.
But of the 4,788 types of goods imported, Tk 2.32 lakh crore was spent on just 25 products that are either kitchen essentials, used in construction or other industrial purposes.
The top imported items are cotton, diesel, used and scrap ships, furnace oil, palm oil, cement clinker, wheat, crude oil, fertiliser, soybean, hot rolled steel, lentils, iron and steel structures, broken or crushed stones, and peas.
And although these products make up a lion’s share of Bangladesh’s imports, there is no chance of decreasing dependency on them as they are mostly used for essential purposes, said Dr Moniul Islam, a professor of economics at Chattogram University.
“First we have to increase local production of these items to decrease import dependency,” he added, citing how just 15 percent of the country’s demand for wheat is met through local production.
Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue, said the composition of imports shows that a significant portion of these items are essential food, such as wheat and soybean.
Meanwhile, petroleum and fertiliser are inputs for industrial and agricultural production.
“A good amount of product is imported as raw materials and intermediate goods for use in export and domestic market-oriented industries,” said Moazzem, adding that increased industrialisation fuels demand for machinery and raw materials.
He also said the import data also shows increasing dependence on the international market for fertiliser because of the diminishing domestic reserve of natural gas.
Moazzem recommended the government emphasise renewable energy or solar power-based irrigation to cut the use of fossil fuels and thereby reduce import reliance in this regard.
The government collected revenue of Tk 21,690 crore from 14 of the 25 top import products in FY23 while the remaining 11 were allowed duty-free entry for being daily essentials or raw materials for export-oriented industries.
Besides, the import of such goods increased by 3.7 million tonnes, or Tk 38,687 crore, from 62 million tonnes in FY22, when overall imports stood at 88.7 million tonnes worth Tk 4.07 lakh crore.
And although this actually shows a downward trend in import volume, the total cost rose as a result of the ongoing US dollar crunch and hike in global commodity prices.
Mahbubul Alam, president of the Chattogram Chamber of Commerce and Industry, said most of the import cost is spent on fuel, edible oil, construction materials and raw materials of export products.
“This has positive aspects for the country as several government projects are ongoing,” he added.
As per customs data, about 8.7 percent, or Tk 40,082 core, of the total import cost was spent on importing cotton, which enjoys duty-free entry as a key raw material for the garment industry.
Three types of fuel, namely diesel, furnace oil and crude oil, came in second in terms of import cost.
About 9.34 million tonnes of the three fuels were imported at a cost of Tk 48,900 crore in FY23, down from 9.62 million tonnes worth Tk 41,053 crore the previous year.
Meanwhile, some 5.19 million tonnes of used and scrap ships worth Tk 26,360 crore were imported during the last last fiscal year while the import was 6.81 million tonnes worth Tk 33,380 crore in the previous fiscal year.
At the same time, some 3.46 million tonnes of palm, soybean and soybean seeds worth Tk 34,789 crore were imported, down from 3.87 million tonnes worth Tk 31,218 crore in the same period of the previous year.
Also, Tk 10,421crore was spent for importing 12 lakh tonnes of fertiliser while Tk 11,304 crore was spent for 17.7 million tonnes of cement clinker, and Tk 11,099 crore for 25 lakh tonnes of wheat.
In addition, Tk 6,623 crore was spent for 42 lakh tonnes of coal, Tk 4,949 crore for 7 lakh tonnes of hot rolled steel, Tk 4,660 crore for 4.96 lakh tonnes of lentil and Tk 2,831 crore for 12 million tonnes of stone.
Mohammad Fyzur Rahman, commissioner of Chattogram Custom House, said these products are on the list of top import products every year due to the country’s ongoing infrastructural development.
Moreover, food products and raw materials for export-oriented and domestic industries are also on top of the import list.
“In this case, considering their importance, we emphasise on clearing these products quickly while also assessing them at the actual prices,” he added.