Govt allows credit imports for edible oil, onion, sugar ahead of Ramadan

Ahead of Ramadan, the government has given the green light for traders to import eight essential commodities under deferred letters of credit (LCs) to ensure market stability and ease price pressures during the holy month.

The eight items are edible oil, onion, sugar, chickpea, pulse, pea, spices, and dates.

A circular issued by the central bank's Foreign Exchange Policy Department on Thursday said these items could be imported under supplier or buyer credit till 31 March. Traders will have up to 90 days to pay after opening LCs.

A senior central bank official said while sight LCs govern routine imports, deferred LCs are implemented annually to secure adequate essential supplies during Ramadan. This mechanism enables traders to import goods on credit, subsequently selling them to fulfil demand and settling payments afterwards.

Data from the Ministry of Commerce reveals a significant rise in the demand for six essential commodities during Ramadan. Sugar demand skyrockets from 1.35 lakh tonnes to 3 lakh tonnes, mirroring increased consumption of other key staples like edible oil (up from 1.5 lakh tonnes to 3 lakh tonnes), lentils (38,000 tonnes to 1 lakh tonnes), and dates (a tenfold increase from 4,000 tonnes to 50,000 tonnes).

The Bangladesh Bank's supportive measures aim to mitigate potential supply constraints and price fluctuations during the high-demand Ramadan period.