The economy has been hit hard by the effect of Covid-19, but demand for medicines and other healthcare needs is on the rise.
In order to meet that demand, the owners of pharmaceutical companies have increased the import of raw materials for medicines to increase production, as well as the import of medicines.
This picture has emerged through the analysis of the central bank that went through the data concerning the opening of the Letter of Credits (LCs) for the July-December period last year and their settlement.
The analysis was released on Sunday.
The data shows that in July-December last year, the number of LCs opened for drug imports increased by more than 57% compared to the same period in 2019 and the settlement increased by about 39%.
On the other hand, although the Letters of Credit for importing raw materials for making medicines has not increased, the settlement rate has increased by about 15%.
Asked about this, Square Pharmaceuticals' Chief Financial Officer Kabir Reza told The Business Standard that the demand for certain products has increased during the corona period.
Due to the fear that the import might be affected by the pandemic, pharmaceutical companies have already imported more raw materials for medicines, he said, claiming that the profits of drug companies during the pandemic have not increased much.
Citing an example, he said the growth of Square Pharma was 11-12% in July-December while there had been a similar growth in 2019.
The effect of Covid-19 on agricultural production has not been much. On the other hand, the fertility of the land has increased after the last year's flood and farmers are also getting better prices for their products including paddy which encourages them to increase production, according to the analysis.
It said imports of seeds required to enhance production have also increased.
During July-December last year, LC openings for seed imports increased by 18% over the previous year while their settlement rate by more than 97%.
Again, there was a demand for onion import due to fear that the price of the item may go up.
As a result, during the July-December period the rate of opening and settlement of LCs for onion import has also gone up.
The same was the case with soybean oil import.
Asked about it, Distinguished Fellow of the Center for Policy Dialogue Mustafizur Rahman told The Business Standard that the demand for non-food products other than medicines has declined due to decline in income because of the impact of Covid.
But it is less likely that the demand for daily commodities or food products will go down, he said, adding that as production has not been hit hard by Covid and farmers have got good selling prices, they have increased their production which has led to an increase in imports of seeds and other agricultural products.
On the other hand, the opening of LCs for rice imports has increased the most. As the price of rice has gone up, import duty has been reduced to encourage rice imports to bring price stability, according to the data analysis.
As a result, LCs worth $44 million were opened in July-December last year compared to just $2.22 million in the same period in 2019.
One of the biggest indicators of the economy is investment which sees no improvement. Investors are not getting interested in new investments in any industry other than the drug.
The pandemic has hit the import of raw materials for capital machinery and industry.
Compared to the same period of 2019, in July-December last year, LC openings and their settlements in the sector decreased a lot.
Asked about the investment situation, Mustafizur Rahman said the import trend of capital equipment proves that no new investments are being made.
New investments are not being made due to the uncertainty of Covid and declining demand.
He thinks that this situation will have a negative impact on employment.