Closely monitor LCs for onion import, ministry to BB

Commerce ministry has called on the Bangladesh Bank (BB) to closely watch the settlement and open of Letter of Credit (LC) used for onion import from different countries amid the volatile onion market in the country.

Trade Consultant of Commerce Ministry Md Ziaur Rahman on Monday issued a letter asking BB to closely monitor LCs for onion import and to send a copy of the LCs to Finance Division and National Board of Revenue (NBR).

BB instruction is already in effect and the facilities will continue till 31 December this year, read the circular. 

Officials of commerce ministry, on the condition of anonymity, said, “Commerce ministry wants a clear picture of the imported amount of onion from aboard. We want to see how much is imported from Myanmar and Turkey. Last year the government imported onions from Turkey to meet the demand of the local onion crisis,” officials also said.

On Tuesday, BB asked banks to open LC to import onion with a minimum margin from the importers.

A senior official of the central bank explained, "It will assist to reduce importers' initial investment of opening LC.”

"Generally, importers have to deposit 10 percent of a product value as a margin while opening an LC. But for importing onions we instructed banks to take a minimum margin which can be 1 percent.”

He said this facility will enable importers to invest the rest of the money in other sectors.

At present onion price in the world market and henceforth, the local market is rising.

Additionally, commerce ministry sources said unscrupulous businessmen in four districts have stocked a total of 6 lakh tonnes of onion The four districts are Pabna, Faridpur, Rajbari and Manikganj. Country’s law enforcement agencies are now trying to find out those businessmen.

In the retail market per kg onion is selling at 80 to 90 taka in the Dhaka kitchen markets. It spiked at 120 taka per kg two days ago due to sudden ban of onion export from India. 

As a result, consumers are rushing to the kitchen markets to buy extra onion now. The demand for onion is rising quickly.

"The country is already lacking 5 lakh tonnes of onion against demand," the official of commerce ministry said.

"So, immediately we instructed banks to facilitate opening LCs easily. It will take 10 days to bring onion with this easiest LC process," the official further said.

On Sunday, the government withdrew 5 percent duty on onion import in an effort to cool down the overheated local market following its export ban by India.

The decision was taken as per a directive of Prime Minister Sheikh Hasina, said a Finance Ministry handout. The official release says this decision will remain effective until March 31, 2021.

ask/zn