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Container handling at Chittagong port, the country’s main gateway to foreign trade, may see a 13 per cent fall year-on-year in 2022, owing to the ongoing economic volatility and shortage in letters of credit (LCs) opening.
Data from the Chittagong Port Authority (CPA) shows that the port handled 26.68 lakh TEUs (twenty-foot equivalent units) of containers in the first 11 months of this year, while it handled 32.15 lakh TEUs of containers in 2021.
Compared to 2021, container handling may fall four lakh TEUs or 13.15 per cent this year.
Chittagong port secretary Omar Faruk said the reduction in container handling is not related to the capacity of the port, but the trade activities of the country and the global economic crisis.
He said, “The import and export of containerised goods through Chittagong port is decreasing. On the other hand, the import of break bulk cargoes is increasing.
“Basically, imports are going down because of the crisis in international trade. Due to this, container handling may be less than the previous year.
“If the global economy does not improve along with the Russia-Ukraine war situation, this crisis may intensify.”
Fall in import and export
According to CPA data, import container handling at Chittagong port has been falling for the last few months. Between August and November, import containers handling at the port fell by 11.67 per cent.
CPA data shows that import containers handling volume at the port was 1.105 lakh TEUs, 0.97 lakh TEUs, 1.04 lakh TEUs, 1.14 lakh TEUs in November, October, September and August of this year respectively.
The scenario is similar for export containers as well. The number of containers loaded with export goods at the port decreased by 15, 724 TEUS or more than 21 per cent in the span of four months.
According to CPA data, the port handled 59,973 TEUs of export containers in November, 59,331 TEUs in October, 63,803 TEUs in September and 75,697 TEUs in August.
The fall in container handling means the Chittagong port will experience a fall in income this year and that the government will see a fall in revenue from the country’s main trade gateway.
Dollar crisis to blame
The fall in trade through Chittagong port is a worrying sign for the country’s economy, which is recovering from the impacts of the Covid-19 pandemic. If this situation prolongs, the economy will be faced with a much more difficult crisis, warns traders.
According to industry insiders, an imbalanced dollar exchange rate is the main culprit behind the fall in trade,
They said the prices of many import products, including wheat, fuel, cotton and steel are decreasing in the international market. The shipping charges have also decreased significantly. But local traders are failing to use this opportunity as they are failing to open LCs as needed. The government has imposed several strict restrictions on LC-opening to tackle a prolonged dollar crisis and the global economic volatility caused by the Russian war in Ukraine.
Mohammad Mohiuddin, Khatunganj-based importer and general secretary of Khatunganj Artaddar General Traders Association, said, “Due to unstable international situation and imbalanced dollar exchange rate, imports have decreased more than before for the last three months. Our inventories are drying up fast, leading to a hike in commodity prices.”
He said it is getting difficult to decide what to import as traders cannot open LC as they want due to the dollar crisis.
“The cost of import has gone up by 20 per cent and rising fuel prices have exacerbated the crisis,” Mohiuddin said.
