Ctg Port deadlock threatens exports, raises fears of Ramadan price shock: 10 business orgs
The trade bodies have warned of export order cancellations and supply disruptions as the NCT lease dispute drags on
Highlights:
- Trade bodies seek urgent govt action
- Chattogram Port shipping at standstill
- Daily losses run into thousands of crores
- Raw materials stuck, exports delayed
- Costs rising, competitiveness eroding
- Financial risks mounting for banks
Ten leading business organisations have expressed apprehension that prolonged complications surrounding the lease of Chittagong Port's New Mooring Container Terminal (NCT) could lead to export order cancellations and a spike in prices of imported essentials ahead of Ramadan.
In a joint statement issued following an emergency meeting at the Bangladesh Textile Mills Association (BTMA) office in Gulshan this evening (5 February), the organisations urged the authorities to resolve the crisis immediately.
Keep updated, follow The Business Standard's Google news channel
They cautioned that continued disruption at the country's main seaport would inflict severe and potentially irreparable damage on the economy.
The signatories to the statement include the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Employers Federation, Bangladesh Textile Mills Association (BTMA), Dhaka Chamber of Commerce and Industry (DCCI), Metropolitan Chamber of Commerce and Industry (MCCI), Bangladesh Chamber of Industries (BCI), Bangladesh Garment Buying House Association (BGBA), Bangladesh Terry Towel and Linen Manufacturers and Exporters Association (BTTLMEA) and Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA).
"A single day of port closure causes direct losses of several thousand crores of taka," the trade bodies said in the statement.
It added, "In the current situation, import and export activities across all sectors – including ready-made garments – have come to a standstill, putting the country at risk of irreparable economic loss."
The trade bodies warned that if the deadlock persists for even a few more days, major export orders could be cancelled, prompting foreign buyers to make "drastic decisions", including shifting sourcing away from Bangladesh.
"Raw materials for export-oriented industries are not reaching factories on time, while finished goods are piling up at ports awaiting shipment. As a result, exporters are unable to meet delivery deadlines set by international buyers," the statement noted.
The statement noted that shipping at Chattogram Port has come to a complete standstill for the first time in its history, calling the crisis tantamount to shutting down the heart of the national economy.
The organisations also expressed concern over rising costs that would ultimately be passed on to consumers, particularly as Ramadan approaches.
"Imported essential commodities are likely to be delayed in reaching the market. This may lead to artificially high prices, pushing essential goods beyond the reach of the common people. We all have to bear responsibility for this public suffering," the statement said.
According to the statement, the port deadlock has already triggered a severe container backlog, driving up demurrage charges, port fees and storage rents – factors that are increasing production costs and eroding export competitiveness in the long run.
The crisis is also creating instability in bank financing and letter of credit (LC) management, the groups warned.
Delayed shipments could prevent traders from repaying bank loans on time, posing "extreme risks" to the wider financial sector, the trade bodies said.
Meanwhile, the labour leaders at Chattogram Port announced a two-day suspension of the ongoing strike, following negotiations with Shipping Adviser Brig Gen (retd) M Sakhawat Hossain.
The announcement was made by Humayun Kabir and Ibrahim Khokon, coordinators of the Bandar Rokkha Sangram Oikya Parishad, at a press conference at Bandar Bhaban this afternoon (5 February).
Workers are expected to return to work tomorrow morning.
However, the labour leaders warned that they would resume protests from Sunday if the New Mooring Container Terminal (NCT) agreement is not withdrawn.
The protest started last Saturday (31 January) with an eight-hour daily work stoppage from 8am to 4pm, before escalating over the government's lack of response.
As a result of the shutdown, more than 11,000 export-laden containers have remained stranded at the port.
According to labour leaders, the authorities moved ahead with preparations to sign the lease and attempted to suppress the movement by transferring leaders, prompting the Bandar Rokkha Sangram Oikya Parishad to announce a 24-hour shutdown from Tuesday morning, followed by an indefinite strike from yesterday (4 February).
Chattogram business leaders met labour representatives yesterday afternoon, expressing moral support for the movement while urging alternative protests to limit economic losses, but labour leaders refused to withdraw the stoppage and reiterated their demand to cancel the DP World lease.
