The country’s apex trade body has urged banks to exercise more flexibility while highlighting the negative impact of China’s coronavirus out-break on the supply chain of imported raw materials and products for the local businesses.
Since its outbreak in China's Hubei province in December last year, the novel coronavirus has killed 2,345 people and infected more than 77,000 people in the country. The virus has since spread to over 30 countries around the world with the world's second largest economy, China, taking a big hit.
Bangladesh imported 672,000 tonnes of goods from China in January this year compared to 851,000 tonnes at the same time last year, marking a 21 percent drop, according to the FBCCI.
FBCCI president Sheikh Fazle Fahim urged banks not to impose additional charges or penalty interest if an LC holder informs them that they will not be able to submit the necessary paperwork on time due to ship Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) today sought policy support from government to face the coronavirus impart as Bangladesh depends on China for raw materials and capital machinery of different sectors.
FBCCI President Sheikh Fazle Fahim in a press conference at federation office in Motijheel held on Saturday (Feb.22) said they feared the possibility of payment overdue in banking sector as supply chain had been impeded for nearly one month.
Special policy support is needed ensuring loan assistance, repayment of LC, cooperation of government offices and ports for the businesses to overcome the deadlock posed by Coronavirus, he said.
China is main sources of raw materials for fabrics and synthetic yarn in readymade garment (RMG) sector while 60 percent raw materials of woven garment and 15-20 percent raw materials of knitwear come from China. Apart from these, other industrial sectors have also been running depending on China.
Fazle Fahim said trade operation with China has become almost stagnant while complexities are being shown in getting documents and shipment for the LCs which were opened previously.
He requested the government to put special concentration so that businessmen’s bank accounts are not made classified when they submit required documents related to coronavirus, and even no additional charge and interest are imposed.
The FBCCI President also urged the banks to allow the LC holders, who already opened LC, to import materials from alternative sources (if they have any) in the case of shipment delay or shipment not possible immediately. He also requested the concerned banks to provide short term loan to the LC holders beyond the LC limit.
In last January, Bangladesh imported 6.72 lakh tonnes of products from China against 8.51 lakh tones in the same period of 2019 and 8.92 lakh tones in January, 2018.
We have been assured from different provinces and suppliers of China that situation started to become normal and shipment would start soon after February 24, said Fazle Fahim.
In fiscal 2018-19, bilateral trade volume was US$ 14.68 billion where Bangladesh imported $ 13.86 billion against the export of $ 831 million.
We believe with continuous support from government, banks and other stakeholders in next three quarters we would overcome this situation caused by a month-long supply disruption, hoped FBCCI President.
He also made a proposal to adopt national strategy through discussion with all concerned for supply chain security. We have ensured energy and food security in long term, now it is time to set national strategy for supply chain.