Bangladesh's Import Bills Hit a 53 Month High as Mideast Tensions Lift Fuel Costs

Bangladeshi businesses opened $8.10 billion worth of import letters of credit in September, the highest monthly total in 53 months, since April 2022. The figure, confirmed to The Business Standard by a senior Bangladesh Bank official, marks a 22.37 percent jump from the $6.62 billion opened in September last year. But bankers say the surge is being driven mostly by rising prices, not rising volumes, as fuel costs climb in the wake of the Middle East conflict.

• September LC openings hit $8.10 billion, the highest since April 2022's $8.41 billion
• That is a 22.37 percent jump from $6.62 billion a year earlier; LC settlements stood at $6.38 billion
• Bankers say costlier fuel and raw materials, not bigger order volumes, explain most of the rise
• Fertiliser imports alone topped $200 million in September, at higher unit prices than before

A 53 month high, but not for the reason you might assume

On the surface, an LC boom looks like good news: more businesses opening credit lines to pay for imports usually signals rising economic activity. Bangladesh Bank officials who spoke to The Business Standard were more cautious. They said the jump is concentrated in categories where unit prices, not quantities, have risen. Petroleum product imports were the clearest example. Importers are paying substantially more for essentially the same volumes of fuel, a direct consequence of Middle East tensions pushing up global oil prices over the past two months.

Fertiliser imports told a similar story. More than $200 million worth was brought in during September, and bankers noted that the same quantity now costs noticeably more than it did earlier in the year. Raw material imports did rise in volume terms too, though modestly: tracked figures for zinc, flat steel, and bitumen all showed increases from the previous period. Capital machinery imports, by contrast, stayed flat, which bankers took as a sign that big-ticket industrial expansion is not yet part of the story.

What bankers and businesses are saying

"Raw material imports have also risen somewhat, which could indicate some improvement in business momentum," said Hassan O Rashid, managing director of Prime Bank, adding that any recovery is likely to be slow but that business activity could gradually expand.

A senior business group executive told The Business Standard that import prices have climbed steadily since the Middle East conflict began, with the increase becoming more pronounced over the past two months specifically. A senior private bank official added that businesses are not facing major restrictions on opening new LCs right now, because banks currently have comfortable dollar liquidity to support trade financing, a notable change from the dollar shortages that squeezed importers in past years.

The bigger trade picture

September's LC data lines up with other recent releases pointing to costlier, not necessarily bigger, trade flows. Bangladesh's merchandise imports grew more than 12 percent year on year in the first two months of FY2026-27, reaching $12.20 billion, according to Bangladesh Bank's balance of payments data reported by Dhaka Tribune. Exports over the same period stood at $8.38 billion, leaving a trade deficit of $3.82 billion for July and August, up from $2.96 billion a year earlier, a gap BD Financial Review covered in detail earlier this month. Taken together, the picture is of an economy where import bills are climbing faster than the goods actually moving through ports, largely because of what those goods now cost to bring in.

September LC openings versus recent benchmarks

Period	LC openings	Note
April 2022	$8.41 billion	Previous high point
September 2025	$6.62 billion	Year-ago comparison
September 2026	$8.10 billion	53-month high

A sector-by-sector look at what got pricier

The TBS data breaks out a handful of raw material categories that moved up in volume terms between the two periods compared, even if modestly. Zinc imports rose to roughly 4,200 units from 3,200, flat steel climbed to about 575 units from 500, and bitumen increased to around 650 units from 450. None of those increases are dramatic on their own, but combined with sharply higher unit prices for fuel and fertiliser, they help explain why the overall LC bill jumped by more than a fifth even though a senior private bank official says businesses are not reporting major new restrictions on how much they can import. The picture that emerges is of an import bill rising primarily because the same shopping list now costs more, not because importers are buying dramatically more of everything.

What it means for you

If you run a business that imports raw materials, fuel, or fertiliser, expect landed costs to stay elevated for as long as the Middle East situation keeps global oil prices high, even if the taka holds steady against the dollar. It may be worth locking in supply contracts earlier than usual or building a larger cushion into pricing rather than waiting for costs to ease on their own. Since banks currently have ample dollar liquidity, securing an LC should not be the bottleneck it was in recent years, financing availability is not the constraint right now, cost is.

For everyday consumers, rising import costs for fuel and fertiliser tend to filter through to transport fares and food prices over time, since fertiliser costs affect farming expenses and fuel affects nearly everything that gets moved around the country. Anyone budgeting around a currency move or planning a dollar purchase can check current rates with the site's currency converter before committing to a transaction.