Bangladesh's food-grain imports from the international market dropped drastically during the July-February period in the current fiscal year from that in FY23.
The import of food grains, primarily wheat and rice, fell by 35 per cent during the period in question of fiscal year 2023-24, according to central bank data.
Of the total, rice import fell by 97.5 per cent and wheat saw a 7.8-per cent decline.
Food grains worth more than $1.15 billion were imported during the period, revealed the BB data.
Rice import saw a decline to $13.2 million, while wheat import fell to more than $1.14 billion in the July-February period of FY24.
Food grain imports, mainly rice and wheat, reached around $2.6 billion in FY23, representing a 1.5-per cent increase from the previous FY.
Rice import amounted to $571 million and wheat import to $2.03 billion in the last fiscal year.
Bangladesh, a major importer of wheat from Ukraine, previously relied heavily on the Black Sea country.
Blocking Ukraine's ability to export grain created an opportunity for Russia to increase its share of global markets, according to local importers.
The Russian Grain Union estimates that hard wheat exports soared 1,300 per cent year on year to 657,000 tonnes between 01 July and 10 November 2023.
"Economic challenges tied to LCs and the dollar crisis could be a significant factor behind the notable decline in food grain," emphasised Dr M Masrur Reaz, chairman and founder of Policy Exchange Bangladesh.
He pointed to studies, including those by the Bangladesh Bureau of Statistics (BBS), indicating that rising inflation and the cost-of-living crisis are compelling those below poverty line, and the lower and fixed-income individuals to reduce their food consumption, with adverse impact on their health.
Dr Reaz called for targeted government interventions, advocating for widening direct food support to vulnerable groups to stabilise staple food consumption.
To address the issue in a sustainable manner, he suggested that the government tackle headline inflation and food inflation rates effectively.
Talking to the FE, Biswajit Saha, director of City Group (the parent company of Teer brand), earlier said the rising value of dollar weakened its purchasing power, making it less attractive for borrowers seeking bank loans.
Consequently, borrowers can import fewer goods with the same loan amount.
According to Mr Saha, importers have been advocating for a revision of the single-borrower exposure limit.
Importers are now offering up to 100-per cent cash margins for opening letters of credit (LCs) to import food grains.
Under the Bank Company (Amendment) Act 2023, banks are restricted from exceeding a 25-per cent exposure limit to any single entity, group or counterparty for both funded and non-funded credit.
Besides, central bank regulations stipulate that funded exposure to a single entity or group cannot surpass 15 per cent of a bank's capital at any given time.
On 08 November 2022, the central bank temporarily relaxed the 25 per cent single-borrower exposure limit for coal-based power producers for a five-year period.
