Bangladesh delays non-critical imports following rates hike from China
A SURGE in freight rates between China and the main Bangladeshi port of Chittagong has led to shippers reducing or delaying the import of lower-demand items into Bangladesh
13 December 2020 - 19:00
Freight forwarders say shippers are mostly importing essential consumer goods, while slowing down the import of luxury items with sky-high freight rates that have been pushed higher by the global equipment shortage, reports IHS Media.
A representative of a mainline carrier in Dhaka said the freight rate of a 40-foot high cube container between China and Chittagong through direct service now stands between US$3,200 to $3,500, while the rate for containers coming via transshipment ports is over $2,700.
China is the main source of raw materials and finished goods for Bangladesh. Bilateral trade between the two nations now stands over $16 billion, which is expected to increase after China recently granted duty-free and quota-free market access of nearly all Bangladeshi products.
'China's imports have lowered, and exports gone up. An acute equipment shortage ex-China has forced carriers to raise freight rates,' Kabir Ahmed, president of Bangladesh Freight Forwarders Association (BAFFA) said.
Mr Ahmed said higher rates are causing an increase in production costs of exports such as apparel, as well as raising travel time due to port congestion.
Businesses said the ongoing rate surge will take a toll on small and medium-sized importers in Bangladesh. But garment and raw material users have no option but to bear the expense because they have deadlines to ship finished goods to buyers.
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