Pricier fuel, dollar take toll on land port trades

Hikes in prices of fuel oils and the US dollar and the subsequent increase in transportation costs and LC margins have affected trades through the country's land ports – particularly with neighbouring India.

Major ports such as Benapole in Jashore, Bhomra in Satkhira, and Akhaura in Brahmanbaria saw a drastic fall in imports over the past few months due mainly to higher LC margins – up to 100% for many products – and volatile greenback prices, according to insiders, while a depreciation of the Indian rupee against the US dollar has contributed largely to a fall in exports. 

Besides, increased transportation costs owing to the recent 51% hike in fuel oil prices have badly impacted both exports and imports.  

Take Akhaura land port for example. The port witnessed a 50% drop in exports since the beginning of FY23. Besides, it did not see any import for the last two weeks.   

The port used to have exports worth $2-2.5 lakh a day, which has now come down to only $1 lakh dollar, reports our local correspondent citing the authorities. Frozen fish is the most exported item through the port, followed by cement, plastic and food items.  

"Our exports to India decreased as the value of the dollar has increased against the rupee as well as the taka. In addition, the fuel oil price hike put the traders in a new crisis," Rajeeb Uddin Bhuiyan, an Akhaura-based trader, said.

Earlier, the fare for a truck was only Tk8,000, which has now increased to Tk12,000, said Bhuiyan, who is also the owner of Suyeb Trade International, told The Business Standard. He added that their Indian counterparts reduce their imports for these reasons.

"If the dollar market stabilises and oil prices fall, the export trade will increase again."

Bangladesh usually imports wheat, cosmetics and baby formulas through the AKhaura land port. Wheat imports from India have been irregular for the last few months, while traders have been discouraged from importing luxury items like cosmetics by the central bank with LC margin increased amid the depleting foreign exchange reserves.

Shafiqul Islam, general secretary of the Akhaura Land Port Importers and Exporters Association, said exports through the port have been on the decrease for long. "So, we have been asking for permission to import all goods through the port to keep it going. But we are yet to receive the permission."

"We are also writing to the National Board of Revenue to allow all types of goods imports through this port. We hope that a decision will be made soon in this regard," Assistant Director of Akhaura Land Port Atiqul Islam said.

Benapole sees drastic fall in imports

Benapole customs authorities say imports through the Benapole land port have been on a drastic drop over the first two months (July and August) of the current fiscal year.

As of 24 August, imports through the key land port stood at only 2,00,322 tonnes. During the two months last year, it was 3,81,370 tonnes, according to the Customs House Benapole.

"Traders of both Bangladesh and India are interested in trading using Benapole port for its easy road communication. However, due to the dollar crisis, the government has imposed 100% margin conditions on LCs. Therefore traders cannot open LCs, which reduced imports in July and August," Nasir Uddin, joint secretary of the Benapole C&F Agents Association, told The Business Standard.

Echoing Nasir, former president of the Jashore Chamber of Commerce and Industries Mizanur Rahman Khan said the higher LC margin has created an extreme crisis of liquid money among traders.

"Again, we have to make import payments at higher rates of the dollar. In such a situation, importers are in great trouble now," he added.

Abdur Rashid Mia, joint commissioner of the Customs House at Benapole, told TBS that the Bangladesh Bank has increased the LC margin due to the dollar crisis. "As a result, traders have reduced imports."  

15-20% drop both in exports and imports at Bhomra  

Of the goods imported through Bhomra land port, 80% are stones, while the rest are spices and some other items, said Bhomra Land Port Revenue Officer Amir Mamun.

"Stone import has been normal. However, imports of other products have decreased to less than half."

Besides, exports through the land port have also decreased significantly, the official added.

Overall trade through the port has decreased by 15-20%, he said, adding that revenue collection has also declined as a result.

"In the month of July, revenue amounted to Tk46.75 crore. The collection for August will be calculated at the end of the month. However, revenue will be less than in July," Amir Mamun said. 

Our Brahmanbaria, Jashore, and Satkhira correspondents contributed to this report.