Benapole imports plummet amid dollar crisis

Benapole Port, a crucial trade gateway between Bangladesh and India, has witnessed a substantial decline in imports over the past few years.

According to the latest data, the port imported 17.21 lakh tonnes of goods in fiscal year 2023-24, a significant decrease of 2.82 lakh tonnes compared to the previous year.

Customs officials and business owners attribute the decline primarily to the ongoing dollar crisis. Banks have become increasingly hesitant to open letters of credit (LCs) for importing goods other than essential food items. Consequently, many businesses have been unable to import the necessary products.

The data show the port imported 26.44 lakh tonnes of goods in FY21, but the figure dropped significantly in subsequent years. The decline in imports has also led to a reduction in revenue collection at Benapole Customs House.

Nasir Uddin, joint secretary of the Benapole C&F Agents Association, said due to the ease of communication, traders from both countries show a strong interest in conducting business through Benapole.

"However, the current dollar crisis has led the government to impose a 100% margin requirement for opening LCs. Moreover, banks are not opening LCs, citing the dollar shortage. As a result, imports have decreased," he told TBS.

Faruk Hossain, owner of Madina Autos, one of the largest importers of motorcycle parts in Jashore, told TBS that due to the shortage of dollars, his firm has been forced to reduce the number of LCs it opens.

"Additionally, sales in the market have decreased. Recently, banks have significantly increased interest rates, making it difficult for importers to take out loans and run their businesses. As a result, many businesses are unable to import goods," he said.

Another importer, Zahid Hossain, mentioned that he imports motor parts and distributes them nationwide. However, for the past few years, banks in Jashore have not been opening LCs, which has prevented businesses from importing goods, he said. As a result, Zahid said, they are facing financial losses. He expressed uncertainty about what the future holds.

Motiur Rahman, director of the India-Bangladesh Landport Import Export Committee, told TBS that due to the inability to open LCs, traders have been unable to import goods, leading to a decline in imports. However, he expressed the hope that the situation will normalise this year.

Mizanur Rahman Khan, former president of the Jashore Chamber of Commerce, while talking to TBS, echoed the importers. "Importers are now facing severe difficulties. With trade already struggling, the inability to import goods could lead to financial ruin for those involved in the import sector," he said.

Safayet Hossain, joint commissioner of Benapole Customs House, also cited the dollar crisis as the main reason for the decline in imports. "Businesses are unable to open LCs through banks, which has led to a decline in imports over the past year."

Abdul Mannaf, head of the Khulna-Barishal zone of Al-Arafah Islami Bank, said that due to the high margin requirements, all banks have reduced the number of LCs they open.

He was optimistic that once the dollar crisis is resolved, imports will become easier.

Abdul Haque, manager of Eastern Bank's Jashore branch, also said most banks have reduced LCs due to the dollar shortage.