FBCCI demands support to bridge over coronavirus
The country's apex trade body yesterday needed policy support from the federal government to greatly help businesses tide over the massive supply disruptions as a result of the coronavirus pandemic in China.
Banks should offer special credit facility to the businesses that contain opened letters of credit to import products from China but have already been unable to due to the lockdown in large parts of Chine to greatly help avoid defaulting on the instalment payments.
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) came up with the proposals at a press conference at its office in Dhaka.
Banks should not impose additional charges on LCs and penal interest on loans that were earlier disbursed to businesses, said FBCCI President Sheikh Fazle Fahim, while calling for a national technique to tackle the crisis.
"The federal government should resolve the situation soon," he said.
Since the deadly virus was first reported in China in December this past year, the outbreak has rattled the global economy and disrupted supply chains.
Bangladesh's trade with China is facing the doldrums as complexities have arisen for the shipment of the merchandise against which LCs were opened before the outbreak of coronavirus.
"The supply chain has been facing disruption for a month. And we fear that the credit instalments of the firms may face an overdue because of the outbreak."
Normalcy, however, will return within next three quarters if businesses get the required support from the government, Fahim said.
China is the primary source of fabrics and synthetic yarns, the two major recycleables for the export-oriented garment sector.
The world's second biggest economy can be the major supplier of professional recycleables for other sectors, such as leather, plastic, electronics and electrical, footwear, cosmetics and toiletries, computer, water pump and medical instruments.
In January, the united states imported 6.72 lakh tonnes of products from China, down 21 % from a year earlier, in line with the FBCCI.
Last fiscal year, about 26 per cent of Bangladesh's imports worth $52.19 billion originated from China, according to data from the central bank. A year earlier, the share of imports from the united states was 23.8 %.
"The issues pinpointed by the FBCCI are completely logical and banks are worried about the situation as well," said MA Halim Chowdhury, managing director of Pubali Bank.
The Association of Bankers, Bangladesh, a forum of managing directors of banks, has recently discussed the issue so as to explore methods to manage the situation.
The central bank has collected trade-related data of China from each bank, he said.
"I believe the central bank may give a roadmap to this end to resolve the ongoing situation. We are looking forward to the central bank's instructions," Chowdhury said.
Agrani Bank Managing Director Mohammad Shams-Ul Islam echoed Chowdhury.
"The problems could be resolved by taking collective steps," he said, adding that the problem is still in order.
A lot of the demands placed by the FBCCI will be fulfilled under the existing central bank's rules, said a Bangladesh Bank official with direct understanding of the matter.
However, many fresh policy support could be taken for the moment as a way to give credit facility to businesses, he said.
Businesses of varied provinces of China have assured that export from the united states will start from February 24.
"We expect that the government will take measures to release the products to be exported from China promptly from ports," Fahim added.
