The New Nation - Internet Edition

Pulack Ghatack

Trade imbalance of Bangladesh is aggravating remarkably due to increased import of foodgrains in opposite to sharp decline in export volume mainly in the apparel sector.

Higher imports pushed the overall trade deficit to $3.458 billion in the last fiscal period compared to that of $2.889 billion in the previous fiscal period. Trade imbalance in 2006-07 fiscal increased by about 16 per cent compared with the same period of the 2005-06 fiscal.

However, the overall balance of payment is unlikely to face serious pressure, as foreign exchange remitted by overseas workers is showing a healthy trend.

The overall balance showed a surplus of $1.493 billion during the last fiscal period against the surplus of $338 million in the previous fiscal period.

Remittances sent by Bangladeshis working abroad crossed the $1.5 billion threshold in the first three months of the current fiscal year. That marks a 22.61 per cent growth over the corresponding period of the previous fiscal.

The expatriates remitted 318.32 million dollar during the first 18 days of the current month. But the remittances in the third week declined to $69.85 million from $117.88 m in the 2nd week and $130.59 m in the 1st week, a Bangladesh Bank report says.

But, according to figures released by the Export Promotion Bureau (EPB), export earnings in the first two months (July-August) of the current fiscal year fell 23 per cent short of the period's target of $ 2,642 million due mainly to sharp fall in garment export.

It also declined about 12 per cent to $ 2,033 million from US$ 2,302 million during the same period last year.

Import payment to the Asian Clearing Union (ACU) increased by 17.95 per cent during the September-October period compared with that of the July-August period of this year, as import of food grains, raw cotton and fabrics witnessed a sharp rise.

The amount of ACU payment has increased to $460 million during the September-October period from $390 million of the July-August period of the current year 2007, they add.

The country's foreign exchange reserve is likely to come down to nearly US$5.0 billion after making the routine payment amounting to US$460 million to the ACU by the first week of this month.

The export figures would continue to show sluggish trend until September '07, which may start to bounce back from October onwards with increased shipments, informed sources said.

According to EPB figures, export quantity declined by 11 per cent in July-August while prices declined over one per cent. However, prices of primary products increased about 9 per cent, but declined about 2 per cent in case of manufactured products.

The country exported garments worth 1.55 billion dollars in July and August, 14.3 per cent less than that of the same period a year ago. Earnings from the main export sector suffered setback during the period with woven garments falling about 23 per cent short of the target to US$ 762 million and declined 17 per cent from the same month in the previous year.

Knitwear also dropped 20 per cent from the target to US$ 792 million and 12 per cent from July-August '06.

Earnings from frozen food exports fell 9 per cent short of the target to US$ 99 million, but recorded 2 per cent growth from the same months in the previous year.

Other major items recording decline from the target and previous year's performance were home textiles, engineering products, handicrafts, leather and leather products, chemical products, ceramic products, computer services, jute goods, petroleum byproducts and terry towel.

Export earnings from vegetables, tea, cut flower and agro-processed foods crossed the target of the period and also last year's performance while raw jute, footwear and electronics did better than last year's performance but fell short of their respective targets.