Weekly News Clippings (January 2, 2014)

Living costs soar (The Daily Star, Jan 2, 2014)
Consumers suffered increased costs of living by as much as 11 percent in 2013 on top of rising house rent, utility bills and prices of essential food items.  According to the Consumers Association of Bangladesh (CAB ) the prices of food and services rose by 12 percent and house rent by 10.9 percent over the year. The cost of electricity and fuel also increased in 2013, by 7.3 and 5.65 percent respectively, and water became dearer. It estimated the cost of living based on weights of commodities and services in the consumer basket.


Court orders arrest of Tazreen owner, 5 others (Dhaka Tribune, Jan 1, 2014)
A Dhaka Court has issued arrest warrants against six fugitives including Delwar Hossain and his wife, the owners of Tazreen Fashions Limited, a year after the tragic deaths of over 110 workers at the factory. The fire at the garment factory at Ashulia in November, 2012 raised a wave of concern among the national and international community over the safety and labour practices in Bangladesh garment factories. 

Foreign business proposals being diverted from Bangladesh (The Financial Express, Jan 1, 2014)
The ongoing political turmoil has affected the country's international business deals as foreign buyers are refusing to visit Bangladesh due to security reasons. Some of the overseas buyers have already diverted their proposals to other countries as alternative options. Sectors like apparel, shrimp, manpower and other export-oriented industries have been worst hit.  According to the President of the Federation of Bangladesh Chamber of Commerce and Industry more than 80 per cent of the country's foreign business partners have been asking to sign the deals in another country since the last couple of months as there has been isolated incidents of harassing foreign buyers by the political activists in Dhaka.


Euro Weakens Versus Dollar on Economic Divergence; Pound Rises (Bloomberg Businessweek, Dec 31, 2013)
The exchange rate of the British pound against U.S. dollar once climbed to 1.6578 in London market on Friday, hitting a two-year high, amid growing market confidence on the country's economic recovery. The pound has increased 6.7 per cent against the green back over the past six months. The dollar depreciated 2.5 per cent over the same period, and the euro appreciated 4.4 per cent. Among the 31 most-traded currencies, the Israeli shekel gained the most versus the dollar this year at 7.7 percent.


Farm-based industries count Tk 118 billion loss in last 70 days (The Financial Express, Dec 31, 2013)
Agriculture and agro-based industries, such as produce, jute, poultry, fisheries, livestock, fertilizers, pesticides, farming equipment and agro processors have suffered huge losses due to the ongoing political situation that has been prevailing in the country. The total loss would amount to a minimum of Tk 118 billion over the last 70 days due to blockades, hartals or unofficial embargo on transportation called both by the opposition and the government.  According to the Bangladesh Agricultural Research Institute (BARI), around 40,000 tonnes of vegetables are being wasted in a single day of blockade or hartal due to disruption in transportation.


The year of adversity, resilience (The Daily Star, Dec 31, 2013)
Just as the readymade garment sector was recovering its tarnished image from the Tazreen fire of 2012, and the fire at Smart Garments on January, Rana Plaza, an eight-storey building which housed five garment factories, collapsed in April. The worst industrial accident in the nation's history prompted many international buyers to reconsider their sourcing options and the US to suspend its trade privileges for Bangladesh. The sector then witnessed labour unrest over wage rise which lasted for months and brought about suspension of production in more than 300 garment factories. Only after a salary increase of 77 percent on November 21, peace was restored to the sector only to befall in the depths of political chaos. The steep decline of the Indian rupee, the currency of its major competitor on the global market, and appreciation of local currency against the dollar, also eroded Bangladesh’s competitiveness substantially.


Export earnings from jute, jute goods drop drastically (The Financial Express, Dec 29, 2013)
Export earnings from jute and jute goods declined drastically between July and November due to the sanction on Iran and price cuts of the products. According to the industry insiders, the political turmoil in the Middle East and economic gloom in Europe has led to the sluggish demand of the natural fibre. Buyers are now offering $ 103-105 for per hundred jute sacks, from the previous $ 120. According to the Export Promotion Bureau (EPB), earnings from the second largest foreign currency earner after apparel fell by 25 per cent over its export target for the period and by 19.8 per cent compared to the same period of the previous FY.


BB: Supply disruption may risk inflation (Dhaka Tribune, Dec 29, 2013)
Bangladesh Bank has apprehended a number of factors, including supply disruption, in keeping the inflation within the budgetary target of 7%. It said the wage hike in both the private and public sectors stemming from the increase in garment worker wages, and the decision to set up a public sector wage commission will create aggregate demand. According Bangladesh Bureau of Statistics, the country’s point to point inflation rose to 7.15% in November from 7.03% a month earlier, remaining slightly above the budgetary target. 


Political turbulence causes Tk180 crore losses to frozen food exporters (Dhaka Tribune, Dec 28, 2013)
The country’s frozen foods exporters have incurred losses of over Tk180 crore between October and December, as they were unable to ship products due to blockades. Over 10,000 tonnes of frozen shrimps and fishes worth Tk1,000 crore lie in warehouses, as the exporters could not ship their processed frozen foods because of political unrest, said Amin Ullah, president of Bangladesh Frozen Foods Exporters Association. It urged the government to reinstate 10% cash incentive for white fish exporters and to increase cash incentive to 15% from the existing 10% for the exporters of frozen shrimps and demanded reduction of source tax to 0.25% from 0.80.