Bangladesh risks escalate, trade reminders are included!

Introduction

Recently, a sudden coup occurred in Bangladesh, a country with a population of 170 million. The situation was turbulent, trade risks were escalated, traffic blockades and transportation were interrupted, ports were in urgent need of attention, logistics were delayed, and exports were cautious!

The situation in Bangladesh changed suddenly

The nationwide wave of protests in Bangladesh, which was triggered by dissatisfaction with the civil service examination system, reached its peak in an instant after more than a month.

On August 5, Prime Minister Hasina, who had been in power for 15 consecutive years, announced her resignation and left the country. On the 6th, an interim government was established. According to statistics, violent clashes caused by protests across Bangladesh have resulted in at least 413 deaths and 11,000 arrests, AFP reported. There is little sign of when peace will be restored.

Source: CCTV News

Ports in crisis, logistics delayed

The turbulent situation has seriously affected local import and export trade. Chinese foreign trade people reported that after July 18, communications with Bangladeshi customers were no longer stable. In addition, protesters blocked roads in various places, so no vehicles were driving on the highways, disrupting the transportation of import and export goods.

The government declared Monday to Wednesday as a national holiday and all offices will remain closed. Mobile Internet services have been interrupted, and only broadband is available with unstable connections. Factories will remain closed until further orders are issued.

Currently, the Chittagong port is severely congested. Data shows that about 50 ships are queued within 25 nautical miles outside Chittagong, and 41,000 TUE containers are in the port.

Analysts at Linerlytica, an Asian container shipping consultancy that tracks global congestion, said Chittagong, which handles more than 90% of Bangladesh's international trade, is now experiencing the world's worst berthing delays, with many ships forced to wait in the Bay of Bengal for more than a week.

Image source: MarineTraffic

Bangladesh, where to go?

In recent years, Bangladesh's economy has achieved sustained rapid growth, becoming the second largest economy in South Asia and an important exporter (especially clothing exporter).

However, since Bangladesh's economic development relies on export trade, the current poor global economic environment has led to a decrease in export orders and difficulties in paying workers' wages. Bangladesh's Business Standard said that the emergence of protests is related to the country's economy.

The sudden political upheaval has cast a shadow on Bangladesh's development prospects.

Experts believe that the protests have had a significant impact on Bangladesh's economy. The Bangladesh Foreign Investors Chamber of Commerce and Industry previously estimated that the wave of protests has caused Bangladesh more than $10 billion in economic losses. International organizations have also downgraded Bangladesh's credit rating, which will affect investor confidence. But if Bangladesh's politics can be restored to stability, the economy should also resume development. After all, Bangladesh still has many advantages in terms of abundant labor and improved infrastructure.

For foreign trade business, Bangladesh is a country with foreign exchange control and a perennial shortage of foreign exchange. Therefore, according to the relevant regulations of the Bangladesh Central Bank on foreign exchange management, except for special circumstances, foreign payments for imports and exports generally must be made by bank letters of credit.

The current situation in Bangladesh is turbulent, and the direct impact may be the issue of document delivery. Considering the current situation in Bangladesh, foreign trade companies need to be cautious and pay attention to risk control to avoid losses!

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