State-owned Janata Bank recorded a substantial loss of Tk3,931 crore in 2025, marking a 28% increase compared to the previous year, according to its audited financial statements.

The significant loss has pushed the bank's net asset value further into negative territory, standing at Tk108.51 per share.

The downturn was largely driven by a sharp deficit in net interest income, which reached a negative Tk5,903 crore, alongside a surge in classified loans totaling Tk72,800 crore.

By the end of 2025, the bank's loss per share rose to Tk169.90.

A delegation of US trade representatives, led by Assistant US Trade Representative for South and Central Asia Brendan Lynch, will travel to Dhaka from May 5-7 to discuss ways to strengthen bilateral relations on trade and investment.

The United States looks forward to partnering on the implementation of the US-Bangladesh Agreement on Reciprocal Trade, which aims to enhance economic growth in both countries by improving market access, removing barriers to investment, and boosting commercial opportunities, according to a statement from the US embassy in Dhaka today.

The country’s remittance inflow has reached $315 million in the first three days of May, reflecting sustained strong inflows from expatriate Bangladeshis, according to data released by the Bangladesh Bank (BB) on Monday.
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During this period, remittance receipts reached $315 million, marking a 260.1 percent increase year-on-year compared to $88 million in the same period last year.

On a cumulative basis, expatriate Bangladeshis sent $29,648 million in remittances from July to May 3, of the current fiscal year, significantly higher than $24,625 million recorded in the corresponding period of the previous fiscal year.

The continued rise in remittance inflow is playing a vital role in supporting external sector stability, strengthening foreign exchange reserves, and contributing to overall macroeconomic resilience.

Farmer Suman Tarfadar cultivated boro paddy on nearly 10 acres of land this year in the haor region. Continuous rainfall submerged and destroyed paddy on around seven acres of his land.

Of the crop he managed to harvest, half could not be dried due to a lack of sunshine and has already started sprouting. Altogether, he now expects to boil and store paddy from only one to one-and-a-half acres.

The farmer from Kadirpur Haor in Khaliajuri Upazila told TBS that despite farming on his own land, he spent nearly Tk3 lakh this season. Most of the crop went under water, while much of the harvested grain has sprouted. "No one will buy this paddy. Only a small amount can be saved. I have never suffered such losses before," he said.

He added that no one wants to buy wet paddy. Some grain from the field was sold for Tk500-Tk600 per maund. Those who managed to harvest and dry before the rain were getting slightly better prices. In previous years, raw paddy from the field sold for Tk800-Tk900 per maund.

This is not just Suman Tarfadar's story, but the reality for farmers across the haor belt. Heavy rain that began in the last week of April submerged paddy on more than 47,000 hectares across seven haor districts — Sunamganj, Sylhet, Habiganj, Moulvibazar, Netrokona, Kishoreganj and Brahmanbaria.

In the four districts of Sylhet division alone, nearly 34,000 hectares have gone under water.

According to the Department of Agricultural Extension, around 25% of paddy still remains in the fields. Farmers and locals, however, say the actual losses are much higher.

Most of Bangladesh's rice is produced during the boro season, with around 10% coming from haor areas. Sources at the agricultural extension department said boro paddy was cultivated on 9,63,000 hectares in the seven haor districts this year. Of that, 4,55,000 hectares were in haor areas and 5,08,000 hectares in non-haor areas.

Farmer Babulal Das from Kalnigar said he cultivated boro on 10 bighas of land. Harvesting is nearly complete, but drying the grain is impossible. "The yard and roads are wet from rain, and the fields are under water. I have nowhere to dry the paddy. It is now sprouting and will be useless," he said.

Farmer Mahbub Alam from Naluar Haor said he harvested paddy standing in water during rainfall, but without sunshine it cannot be dried. "The paddy is rotting, the straw is being ruined. We are in great distress," he said.

Woman farmer Sabana Begum from Shanir Haor said boiled paddy from 36 decimals of land could not be dried because of nonstop rain. "The paddy is rotting and giving off a smell. I cry when I look at it," she said.

Sources at the Department of Agricultural Extension said 57% of boro harvesting has been completed in Sylhet division this season. This includes 75% in haor areas and 33% in non-haor areas.

Additional director of the department in Sylhet division, Dr Md Mosharraf Hossain, said the remaining 25% of submerged paddy in haor areas could be completely lost. More grain is also likely to be damaged because it cannot be dried.

"There is no artificial arrangement to dry so much paddy at once. We have to depend on nature," he said. He added that the government began rice and paddy procurement from Sunday, which could reduce farmers' losses somewhat. Losses could fall further if mill owners began buying paddy, but they have not yet started purchases.

Meanwhile, the Flood Forecasting and Warning Centre under the Bangladesh Water Development Board said water in several rivers of the north-eastern haor basin is already flowing above pre-monsoon danger levels.

These include points on the Naljur River, Baulai River, Bhugai-Kangsha River, Someshwari River, Mogra River, Kalni-Kushiyara River and Sutang River.

Over the past 24 hours, moderate to heavy rainfall occurred upstream and across haor areas, and rain may continue for the next three days. As a result, water levels in the Surma River and Kushiyara River may rise further, crossing danger levels at some points by the second day and creating flooding in low-lying areas of Sylhet and Sunamganj.

Water levels in the Bhugai-Kangsha River, Someshwari River and Dhanu-Baulai Basin may remain stable over the next three days, though flooding in adjacent lowlands may continue.

In Moulvibazar and Habiganj, water in the Manu River, Khowai River and Juri River may stay stable for two days before rising on the third day, with the Juri River nearing warning level.

Overall, the agency said continuous rainfall is likely to prolong ongoing flooding in low-lying haor areas of the north-east, while creating fresh flood risks in some locations.

MJL Bangladesh PLC, a leading lubricant and energy company, reported a 27% drop in consolidated net profit in the first nine months of FY26, primarily due to lower revenue and the withdrawal of key tax benefits.

According to the company's unaudited financial statements for the July-March period, the consolidated net profit dropped to Tk187.23 crore, down from Tk256.21 crore in the corresponding period of the previous year.

This downturn significantly impacted the company's earnings per share (EPS), which settled at Tk5.91 at the end of the first three quarters, compared to Tk8.09 during the same period a year earlier.

The company's consolidated net revenue also experienced an 8% decline, falling to Tk3,016 crore from Tk3,263 crore.

Management attributed the earnings slump to a combination of an 8% decline in revenue, a rise in minimum tax from 0.6% to 1%, and the withdrawal of a tax exemption on its oil tanker operations.

Standalone net profit also fell by over 17%, largely driven by the reduced profitability of the oil tanker segment.

However, the company posted a strong rebound in the third quarter. In January-March 2026, MJL's consolidated net profit rose 44% to Tk65 crore, supported by an 18% surge in revenue, which climbed to Tk1,148 crore, alongside a reduction in finance costs.

MJL Bangladesh, known for its state-of-the-art lube oil blending plant, remains a dominant provider of high-performance lubricants and energy solutions in the local market, while also maintaining an active presence in international exports.

MJL Bangladesh shares price edged up by 0.68% today (4 May) to reach at Tk88.70 at the Dhaka Stock Exchange.

Bangladeshi garment exporters will today ask visiting US trade officials in Dhaka to clarify how a promised zero reciprocal tariff will apply to apparel made with American cotton and other US textile inputs.

The provision is included in the US-Bangladesh Agreement on Reciprocal Trade signed in February this year, but exporters say they have yet to benefit from it.

“We will raise this issue with the USTR high-ups in the meeting tomorrow [Tuesday],” said Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

A delegation from the Office of the United States Trade Representative (USTR), led by Assistant US Trade Representative for South and Central Asia Brendan Lynch, will visit Dhaka from May 5 to May 7.

In a statement issued ahead of the visit, the US Embassy in Dhaka said the United States looks forward to partnering on the implementation of the reciprocal trade agreement. The delegation is expected to discuss ways to strengthen trade and investment ties.

Under Article 5.3 of the reciprocal trade agreement, the United States commits to establishing a mechanism allowing certain textile and apparel goods from Bangladesh to enter the American market at a zero reciprocal tariff rate.

The deal says that a to be specified volume of apparel and textile imports from Bangladesh may qualify for the reduced rate. That volume will be determined in relation to the quantity of US-produced cotton and man-made fibre textile inputs exported to Bangladesh.

However, BGMEA President Khan said Bangladesh is not currently enjoying the benefits in the US market.

He said the zero-duty facility would be the main agenda at the scheduled meeting between the visiting officials and BGMEA leaders in Dhaka.

A senior commerce ministry official said the USTR delegation will also meet Commerce Minister Khandakar Abdul Muktadir at the secretariat today. Discussions are expected to cover the reciprocal trade deal, broader bilateral trade matters, labour rights and intellectual property.

The USTR is currently conducting two investigations covering 60 countries, including Bangladesh. One is about forced labour in industrial units, while the other relates to industrial overcapacity that could hurt the US manufacturers.

In a position paper submitted to the commerce ministry recently, BGMEA said the Bangladesh garment industry does not have overproduction capacity that could harm the American manufacturing sector and is free from forced labour, as exporters comply with internationally recognised labour laws.

The association said that in a market-driven economy, production levels constantly adjust to shifts in demand, input costs and supply chain conditions. Determining “excess capacity” without clear parameters or methodology is a major challenge.

According to USTR data, US goods trade with Bangladesh totalled an estimated $11.8 billion in 2025. US imports from Bangladesh stood at $9.5 billion, up 13.3 percent from 2024, while US exports to Bangladesh were $2.3 billion, up 1.4 percent.

The US goods trade deficit with Bangladesh was $7.1 billion in 2025, a 17.9 percent increase from the previous year.

Garments account for 86 percent of Bangladesh’s exports to the United States.

In its position paper, BGMEA said the Bangladesh apparel sector has not expanded suddenly or in a way that would indicate structural excess capacity. The industry growth should be viewed over the long term.

Over the past decade, the sector has followed a steady growth path, it said, driven by global demand and shifting sourcing strategies rather than policy-induced expansion.

After more than four decades of development, Bangladesh exported garment products worth $39.3 billion in fiscal year 2024-25, accounting for nearly 7 percent of the global apparel market. It is now the world’s second-largest garment exporter after China.

In 2025, Bangladesh accounted for 10.73 percent of US apparel imports by volume and 10.53 percent by value, according to the American Apparel and Footwear Association (AAFA).

This week, a separate USTR report said Bangladesh has stayed off the latest US intellectual property rights watch lists. However, Washington urged Dhaka to strengthen enforcement to prevent unfair trade practices.

In its annual Special 301 Report, the USTR identified 26 trading partners with concerns over intellectual property protection and enforcement.

State-owned companies listed on the stock market delivered mixed performances in the January-March quarter of the 2025-26 fiscal year, reflecting uneven sectoral health.

Quarterly public disclosures show energy firms, particularly oil marketing companies, remained profitable, while several entities in financial, gas and industrial sectors continued to incur losses, signalling structural weaknesses.

Oil firms maintain steady profits

The three listed oil marketing companies – Padma Oil Company, Meghna Petroleum and Jamuna Oil – remained profitable in the third quarter of the current fiscal year.

However, their revenues declined compared with the same period last year, reflecting weaker earnings from core operations. Non-operating income, however, played a significant role in sustaining overall profitability.

During the quarter, notable shifts were observed in cash positions and inventory management. Fluctuations in global fuel prices, import costs, stock management and cash flow dynamics were reflected in their financials.

Padma Oil posted a profit of Tk132.37 crore in the January-March quarter FY26, down from Tk145.38 crore in the same period in FY25. Its revenue fell to Tk85.43 crore from Tk92.30 crore.

Meghna Petroleum's profit dropped to Tk83.94 crore from Tk141 crore, while revenue declined to Tk22.95 crore from Tk28.02 crore.

The company said lower collections from customers and reduced payments to suppliers and employees significantly weakened cash flow from operations, leading to a sharp decline in net operating cash flow.

In contrast, Jamuna Oil recorded profit growth, earning Tk139.78 crore compared with Tk110.78 crore. However, its revenue declined to Tk52.12 crore from Tk70.41 crore.

The company in its disclosure said interest income on deposits with Sammilito Islami Bank was not recognised due to uncertainty over recovery. This reduced both total income and net profit, directly affecting earnings per share.

It added that a conservative accounting approach was adopted, excluding uncertain income, which resulted in lower reported EPS. The company also said reduced credit and accruals led to a decline in net operating cash flow per share compared with June 2025.

7 firms remain in red

The Investment Corporation of Bangladesh (ICB) continued to post heavy losses, reporting Tk277 crore in the quarter, up from Tk161 crore a year earlier. Notably, its revenue remained negative at Tk221 crore, compared with negative Tk63 crore in the same period last year.

Titas Gas Transmission and Distribution Company recorded a loss of Tk224 crore, slightly lower than Tk236 crore a year earlier. Its revenue declined to Tk8,613 crore from Tk9,023 crore.

Dhaka Electric Supply Company (Desco) managed to reduce its losses to Tk32 crore from Tk72 crore, while revenue edged up to Tk182.41 crore.

National Tubes Limited slipped into loss, posting Tk1.31 crore in losses against a profit of Tk1.43 crore a year earlier. Its revenue fell to Tk8.12 crore from Tk13.51 crore.

Eastern Cables Limited also remained in the red, reporting a loss of Tk3.45 crore, marginally lower than Tk3.58 crore a year earlier, although revenue rose slightly to Tk8.52 crore.

ICB's losses are seen as reflecting weak investor sentiment in the capital market. Meanwhile, continued losses at gas and power distribution firms also point to structural constraints, pricing issues and operational inefficiencies.

Signs of recovery in select firms

Power Grid Company of Bangladesh staged a strong turnaround, posting a profit of Tk94 crore, compared with a loss of Tk186 crore in the same period last year. Revenue rose to Tk715 crore.

The company said earnings per share increased by Tk6.58 year-on-year in the third quarter. It attributed the improvement to a significant rise in total income and a sharp reduction in overall expenses.

Bangladesh Submarine Cable Company Limited (BSCCL) also recorded robust growth, with profit rising to Tk74.43 crore from Tk47.82 crore a year earlier. Revenue increased to Tk125.31 crore.

The company said higher revenue from regular operations and increased other income drove the rise in earnings per share.

Eastern Lubricants Blenders Limited maintained its growth momentum, posting a profit of Tk4.28 crore, up from Tk1.57 crore a year earlier. Revenue climbed to Tk23.95 crore.

The improvement seen in companies such as Power Grid and BSCCL suggests that effective management, rising demand and supportive policies can enable state-owned enterprises to regain financial stability.

After the onset of the US-Israel war on Iran, some policymakers initially took a firm stance, publicly claiming credit for not adjusting fuel prices to shield consumers from global shocks. They argued that they did not want to pass the burden onto the people.

However, the government could not maintain its stance as it quickly unravelled under fiscal and market realities.

Within weeks, the government reversed course. It raised the price of a 12 kg liquefied petroleum gas (LPG) cylinder by 45 percent after two successive hikes in April.

On April 18, it also pushed fuel prices to record highs: diesel rose by Tk 15 per litre to Tk 115, octane by Tk 20 to Tk 140, petrol by Tk 19 to Tk 135, and kerosene by Tk 18 to Tk 130.

The scale and timing of these adjustments suggest that fiscal constraints, subsidy pressures, and external account vulnerabilities outweighed earlier political commitments.

From a macroeconomic perspective, such hikes drive costs and thus prices of commodities in the supply chain, as higher energy costs spread through transport, production, and supply chains, often creating second-round effects in import-dependent economies like Bangladesh.

A recent report on inflation dynamics of Bangladesh by the central bank showed gas price hikes have pushed up energy inflation to 14.9 percent during the January-March quarter of the current fiscal year 2025-26 from 14.4 percent in the previous quarter.

Economists say the effect of hiking petroleum prices is going to be felt soon, and consumers have already begun to feel the pinch. Transport costs for both passengers and freight have gone up. Farmers complained about the higher cost of harvesting rice and threshing the grains. Consumer goods companies are reducing pack sizes and squeezing margins to cope.

Yet, two ministers -- finance and commerce -- downplayed the inflationary risks.

According to a report published in this newspaper on April 20, Finance Minister Amir Khosru Mahmud Chowdhury said, “It may increase or it may not. If the supply side remains stable, then prices may not rise.”

In reply to a question in the parliament, Commerce Minister Khandakar Abdul Muktadir said it was unlikely that the recent fuel price hike would exacerbate inflation, terming the adjustment “moderate.”

He said the 15 percent increase in diesel prices may raise commodity prices by around Tk 0.30 per kg. However, he said this would not have any major impact on overall inflation, which has remained around 9 percent for more than three years, deepening consumers’ woes.

The wage rate index for unskilled workers illustrates this trend. Inflation has outpaced wage growth for 50 consecutive months, steadily eroding the purchasing power of consumers, particularly those in middle- and lower-income groups. It means that real wages have been in the negative for more than four years.

Consumers are set to face further pressure as the commerce ministry has allowed refiners to raise soybean oil prices by Tk 4 per litre, or 2 percent.

The situation worsened by earlier supply disruptions triggered by the Iran War, which had already pushed up global energy and transport costs. Diesel-dependent sectors such as agriculture, manufacturing, and transport are now under additional pressure, raising concerns that the increased costs will eventually be passed on to consumers in an already high-inflation economy.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said the recent fuel price hike is likely to ripple across the economy through a “multiplier effect.”

He noted that fuel acts as a “barometer of commodity prices,” meaning its increase will inevitably influence a wide range of goods, though not uniformly.

He explained that the current situation reflects “cost-push inflation,” driven by rising input costs rather than demand.

However, he cautioned against overstating the scale of the impact, emphasising that the extent of price increases will depend on how significant fuel costs are within each product’s overall cost structure.

“If fuel accounts for a portion of total costs, a 15 percent increase in fuel prices does not translate into a 15 percent rise in final prices,” he said, illustrating that the actual effect would be proportionally smaller.

Rahman stressed that while some level of price increase is unavoidable, the degree to which it affects consumers will depend heavily on market behaviour and oversight.

“The pass-through to retail prices depends significantly on market management,” he said, warning that unchecked responses, such as transport operators raising fares disproportionately, could worsen inflationary pressures.

He also underscored the growing importance of regulatory monitoring, particularly in sectors with administered pricing, and highlighted the need for stronger safeguards for vulnerable groups.

“For low-income people, even a small increase in prices creates significant hardship,” he said, adding that effective implementation of social safety measures will be critical to easing the burden.

Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development, echoed similar concerns, warning that higher energy prices would inevitably feed into overall price levels.

“If energy and oil prices increase, our price levels will increase. This is almost inevitable,” he said. “There is a ‘one-to-one’ correspondence, as the transmission channel is very deep.”

He explained that a fuel price increase typically triggers broader inflationary pressures across the economy.

“When oil prices increase, we’ve seen a 15-20 percent increase across different varieties. It exerts pressure on other supply chain elements, which overall impacts our prices. They might be saying it for political reasons, but the economic reality is that this will fuel inflationary pressure further,” he added.

Razzaque also noted that the impact is more severe in Bangladesh compared to other countries due to already elevated inflation.

“It’s not just happening in Bangladesh; many countries have already increased their fuel prices. The problem for Bangladesh is that our baseline inflation rate was already high, hovering around 9 to 10 percent. When this impact is added, it creates even more pressure. In countries like Cambodia, where inflation was lower, it was easier to absorb. But for us, it’s almost inevitable that prices will go up,” he said.

He also raised concerns over inflation measurement, especially LPG pricing. He said the Bangladesh Bureau of Statistics (BBS) relies on government-set rates, which may not reflect market reality.

Razzaque added that official figures could be misleading if based on listed prices rather than what consumers actually pay, urging surveys of real market prices for more accurate inflation data.

Paramount Textile, a listed company on the bourses, reported a year-on-year revenue decline of more than 15% in the first nine months of the current fiscal year, according to its consolidated quarterly financial statements.

Despite a nosedive in revenue, the company posted a slight increase in profit to Tk96.81 crore, compared with Tk96.41 crore in the same period last fiscal year. However, earnings per share (EPS) slightly dipped to Tk5.14 from Tk5.22.

The company said its operating profit fell 14% amid the revenue contraction. Still, higher income from other sources and gains from associate companies helped offset the decline, enabling Paramount Textile to register a modest profit growth during the July–March period.

Its report showed that its profit from associates companies surged 250% to Tk36 crore while its other income jumped by 631% to Tk10.81 crore.

It has investment in associates' companies—Paramount BTrac Energy Ltd, a 200 MW HSD power plant and Dynamic sun energy Pvt Ltd, a joint venture company between Paramount Textile Ltd and Global energy project holdings (GEPH).

According to its financial report, in the third quarter during the January to March, its revenue fell by 30% to Tk245.71 crore, a lower from Tk354.01 crore in the same time of the previous fiscal year.

Despite 25% declining in its operating profit, net profit surged 6% to Tk52.65 crore mainly due to increase in share of profit of associates companies.

In the three months, it earned Tk15.79 crore from its associates.

In FY25, Parmount Textile made a profit of Tk116.06 crore with an EPS of TK6.48. It had paid a 12% cash dividend for its shareholders.

Paramount Textile's shares closed at Tk61.60 each today (4 May) at the Dhaka Stock Exchange (DSE), a 2.38% down from the previous trading session.

Bangladesh’s total public debt burden has crossed Tk 22 lakh crore by December 2025 with a growing reliance on domestic sources as the government looks to “insulate the economy from foreign currency risks”.

Of the total debt, Tk 3 lakh crore was borrowed during the interim government period, according to the finance ministry’s latest quarterly bulletin.

The bulletin states the public debt stood at Tk 18.9 lakh crore at the end of June 2024, just a month before the interim administration assumed power. The figure was Tk 13.44 lakh crore at the end of June 2022.

During the interim period, domestic debt rose by Tk 1.70 lakh crore, reaching Tk 12.5 lakh crore by December. Foreign loans increased by Tk 1.47 lakh crore to Tk 9.59 lakh crore in the same period.

Domestic borrowing dominates the government’s overall debt portfolio. As of December 31, 2025, the domestic and external liabilities constituted 57 percent and 43 percent of the total government debt stock, respectively.

“By focusing on the local market, the government is deepening domestic liquidity while reducing its exposure to exchange rate fluctuations,” said the bulletin.

During the July-December period of the current fiscal year, the government’s total borrowing rose by Tk 62,428 crore, or 13 percent, compared to the same period a year earlier.

During the period, loans from the foreign sector dropped by 59 percent to Tk 10,130 crore, while domestic borrowing surged 70 percent to Tk 52,298 crore.

Of the domestic borrowing, Tk 19,470 crore was borrowed from the central bank alone.

Most of the domestic loans were raised through government securities. “A key feature of the government’s approach was a clear shift toward long-term debt,” the finance ministry said.

Meanwhile, total interest payment during the July-December period rose by 22 percent to Tk 71,253 crore. Of these, interest payment for domestic borrowing stood at Tk 61,866 crore, a 25 percent surge from the same period a year ago.

While increased domestic borrowing often raises concerns about “crowding out,” the current landscape suggests a unique window of opportunity, said the ministry.

It argued that ample liquidity in stronger banks, falling yields on government securities, and subdued private-sector credit demand create conditions for sustainable domestic financing without crowding out private borrowers.

By leveraging this internal liquidity, the state is building a more resilient and self-reliant fiscal framework that maintains stability without straining the private credit market, it added.

The country's premier bourse returned to positive territory today as a wave of bargain hunting helped the benchmark index snap a two-session losing streak, although overall market capitalisation fell by Tk5,000 crore.

Despite lingering concerns over global geopolitical dynamics and domestic economic factors, opportunistic investors moved in to accumulate beaten-down scrips, particularly in the banking and manufacturing sectors.

The benchmark DSEX index of the Dhaka Stock Exchange rose by 12 points to settle at 5,277, while the blue-chip DS30 index followed suit, gaining 4 points to close at 2,023.

Market participation showed signs of improvement as total turnover at the DSE climbed by 6% to reach Tk877 crore compared to the previous session.

According to the daily market review by EBL Securities, the capital bourse staged a modest rebound supported by resilient investor participation. The market opened on a firm note with steady accumulation through the mid-session.

However, the upward momentum was somewhat tempered toward the end of the day as cautious selling from some quarters trimmed intraday gains.

Interestingly, while the key indices rose, the overall market capitalisation at the DSE dropped by Tk5,000 crore to settle at Tk6.81 lakh crore, a phenomenon largely attributed to the price adjustment of high-cap stocks.

On the sectoral front, the banking sector dominated market activity, accounting for 19.1% of the total turnover. This was followed by the engineering and pharmaceutical sectors, which contributed 12.5% and 12.4% to the day's volume, respectively.

In terms of returns, the ceramic sector led the gainers with a 3.1% increase, followed by jute at 2.9% and information technology at 1.5%. On the downside, the general insurance, mutual fund, and food sectors faced corrections, with general insurance declining by 1.0%.

The market breadth remained slightly in favour of the bulls, as 174 issues advanced compared to 159 that declined, while 63 remained unchanged.

Individual stock performance was highlighted by JMI Syringe and JMI Hospital, both of which surged by nearly 10% to lead the gainers' list.

On the other hand, City Bank emerged as the top loser of the day, shedding 13.33% of its value.

However, market analysts noted that this sharp decline was due to the technical adjustment of its share price following the record date for its 15% stock dividend declaration for the year 2025.

The positive sentiment was partially mirrored at the Chittagong Stock Exchange (CSE), where the CSCX index ended 6 points higher at 9,093. However, the CASPI edged down by 4 points to settle at 14,783.

Trading activity at the port city bourse saw a significant contraction, with turnover plunging by 59% to stand at a modest Tk16.77 crore.

Oil prices edged higher on Monday, supported by the absence of a US-Iran peace deal that kept supplies constrained and prices above $100 a barrel.

Brent crude futures were up 67 cents, or 0.6%, to $108.84 a barrel at 0400 GMT after settling down $2.23 on Friday. US West Texas Intermediate was up 65 cents, also 0.6%, at $102.59 a barrel, after a $3.13 loss on Friday.

"The broader market remains tightly supported by persistent supply disruptions and geopolitical uncertainty," said Priyanka Sachdeva, analyst at Phillip Nova.

"Unless there is a clear and sustained resolution that restores normal flows through the Strait of Hormuz, oil prices are likely to remain elevated, with risks still tilted toward further upside."

President Donald Trump said the US would begin efforts to assist ships stranded in the Strait of Hormuz, but prices stayed above $100 a barrel, with no peace deal in sight and shipping through the strategic waterway still constrained.

Negotiations between the US and Iran continued over the weekend, with both sides assessing each other's responses.

Trump has made securing a nuclear deal with Tehran a priority, but Iran wants to defer nuclear talks until after the war and first lift rival blockades on Gulf shipping.

On Sunday, the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, said it would raise oil output targets by 188,000 barrels per day in June for seven members, marking the third consecutive monthly increase.

The rise matches that agreed for May, minus the share of the United Arab Emirates, which left OPEC on May 1. However, the additional barrels are expected to remain largely on paper as long as the Iran war continues to disrupt Gulf oil supplies through the Strait of Hormuz.

Mobile operators have called on the National Board of Revenue (NBR) to withdraw value-added tax (VAT) on spectrum and spectrum-related fees, arguing the levy contradicts global norms and undermines investment in the sector.

In a recent letter sent to the NBR chairman, the Association of Mobile Telecom Operators of Bangladesh (AMTOB) described the proposed withdrawal as a vital step to rectify a fundamental misalignment in Bangladesh’s VAT regime.

The association said radio spectrum, the finite range of frequencies over which all wireless communication travels, is an intangible national resource administered by the Bangladesh Telecommunication Regulatory Commission (BTRC).

“Its [radio spectrum] assignment, renewal, and usage confer a sovereign regulatory right -- not a commercial supply of goods or services under any legal interpretation,” wrote Mohammad Zulfikar, the association’s secretary general.

Hence, imposing VAT on spectrum and spectrum fees, AMTOB argued, effectively turns a regulatory charge into a taxable transaction.

“Imposing VAT here transforms a non-commercial regulatory grant into an artificial taxable event,” it added.

According to the letter, telecom companies are required to pay VAT on spectrum fees without being able to claim input tax credits, increasing operational costs.

It said the BTRC’s lack of VAT registration prevents it from issuing standard invoices. “This renders the VAT non-creditable and traps it as a pure cost to the operators.”

AMTOB warned that the arrangement stifles network investment, 5G rollout, and rural coverage expansion.

It cited frameworks in the European Union, India, the United Kingdom, and Australia, where spectrum charges are treated as sovereign regulatory fees outside the VAT net.

“Bangladesh’s current approach deviates from this consensus, creating indefensible inefficiencies,” the letter said.

The association noted that the sector already carries a heavy tax burden -- corporate income tax, BTRC revenue sharing, spectrum and licence fees, and VAT on services.

“In 2024, we contributed approximately Tk 22,000 crore,” the letter noted, warning that additional non-creditable taxes could affect affordability and innovation in the sector.

In the letter, AMTOB placed two demands before the tax authority: the immediate withdrawal of VAT on spectrum-related payments, and formal clarification categorising these charges as sovereign regulatory fees outside the VAT net.

Shahed Alam, chief corporate and regulatory officer at Robi Axiata, said, “Treating spectrum fees as VAT-exempt regulatory charges, in alignment with global best practices, would restore tax neutrality, reduce financial pressure, and improve cost efficiency.”

An internal Bangladesh Bank (BB) document has revealed significant exposure of the country’s banking sector to high-risk of defaulted loans linked to six major business conglomerates.
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The confidential analysis highlights widespread vulnerabilities across multiple banks, raising concerns over asset quality and risk management in the financial sector.

The document, titled “Selected Lead Banks, Impacted by Six Groups”, categorises affected financial institutions based on their exposure to non-performing loans associated with six business groups. The groups or individuals identified are: Saifuzzaman Chowdhury, S Alam, Beximco, Sikdar, Nassa and Orion.

According to the data, Islami Bank Bangladesh PLC appears in five of the six exposure categories, indicating extensive involvement across multiple high-risk loan portfolios. Newly consolidated Sammilito Islami Bank PLC is listed under all six groups, suggesting that its balance sheet carries significant inherited non-performing assets from merged weak banks.

Other banks appearing frequently across the exposure lists include First Security Islami Bank, Social Islami Bank, Union Bank, Janata Bank, Rupali Bank, IFIC Bank, United Commercial Bank, AB Bank and Al-Arafah Islami Bank.

State-owned banks such as Sonali Bank and Agrani Bank are also shown to have notable exposure to defaulted loans linked to the identified groups.

In response to the rising systemic risk, Bangladesh Bank has initiated steps to assign selected institutions as “lead banks” to coordinate recovery efforts in collaboration with international firms.

The criteria for selecting lead banks reportedly prioritise institutions with prior experience in handling international non-disclosure agreements (NDAs), enabling them to manage complex negotiations and recovery processes.

The designated lead banks for each group are as follows:

Saifuzzaman Chowdhury group: United Commercial Bank PLC (lead), Islami Bank Bangladesh PLC, Al-Arafah Islami Bank PLC

S Alam group: Islami Bank Bangladesh PLC (lead), Janata Bank PLC, Sammilito Islami Bank PLC.

Beximco group: National Bank PLC (lead), Janata Bank PLC.

Sikdar group: IFIC Bank PLC (lead), Sammilito Islami Bank PLC, Agrani Bank PLC.

Nassa group: National Bank PLC (lead), IFIC Bank PLC, Al-Arafah Islami Bank PLC.

Orion group: United Commercial Bank PLC (lead), Agrani Bank PLC.

The document also states that banks undergoing or scheduled for merger will not be eligible to act as lead banks, reflecting ongoing policy considerations within Bangladesh Bank.

Officials said the move indicates a shift towards a more coordinated and externally supported recovery strategy aimed at addressing long-standing default loan problems in the banking sector.

Indian businesses have urged Bangladesh to ensure institutional stability, policy consistency, and reduce logistics bottlenecks to enhance bilateral trade and attract foreign direct investment (FDI).

They also expressed optimism that the proposed Comprehensive Economic Partnership Agreement (Cepa) between the two neighbouring countries could significantly expand trade and investment flows.

The observations came during a meeting between leaders of the Confederation of Indian Industry (CII) and a visiting Bangladeshi media delegation in New Delhi.

Pankaj Tandon, a member of CII's South Asia Committee, said that strengthening institutions and ensuring policy predictability are key to boosting investor confidence.

"To boost investment and trade, Bangladesh needs institutional stability, policy consistency, and stronger institutional accountability," he noted.

He added that the current phase of Bangladesh-India relations is critical not only for sustaining existing ties but also for shaping the next stage of economic partnership to support Bangladesh's long-term growth and competitiveness.

Describing Bangladesh as India's largest trading partner in South Asia, Tandon said bilateral trade stood at over $13 billion in the 2024-25 fiscal year.

"Bangladesh's industrial strength and India's manufacturing and services sectors complement each other, creating opportunities for integrated regional value chains," he said.

He also highlighted potential areas of collaboration, including medical tourism, food processing, agricultural value chains, the digital economy, startups, energy cooperation, and SME linkages.

According to Tandon, India's expertise in digital public infrastructure, fintech, renewable energy, manufacturing excellence, and sustainable development could support Bangladesh's economic transformation.

Regarding restrictions on Bangladesh's ready-made garment (RMG) exports through Indian land ports, he said CII could work jointly on the issue if Bangladeshi business chambers formally raise it.

He reaffirmed CII's commitment to working closely with Bangladeshi organisations to deepen bilateral business-to-business engagement and strengthen economic cooperation.

At the event, Geetanjali Nataraj of CII delivered a presentation, while Manish Mohan, director of CII, also spoke.

Bangladesh Bank's planned Tk40,000 crore refinance scheme to revive closed factories has raised concerns among economists and officials over its potential macroeconomic impact.

The initiative aims to boost production and protect jobs, but questions remain over how it will be financed.

Analysts say the source of funds will be critical in determining whether the scheme adds pressure on prices.

Concerns over inflation

Economists and central bank officials have cautioned that financing the scheme through fresh money creation could increase inflationary pressure by expanding the money supply.

Fahmida Khatun, executive director of the Centre for Policy Dialogue, said the issue is particularly important at a time when many banks are facing liquidity shortages and government revenue growth remains under strain.

"At present, many banks are facing liquidity shortages, and government revenue growth is also under pressure. If the central bank directly finances the scheme, it could add to inflationary pressure by increasing the money supply," she said.

She suggested that the fund could be mobilised through a combination of sources, including banks with stronger liquidity positions and allocations from the national budget, to help reduce inflation risks.

A senior Bangladesh Bank official also warned that injecting the full amount through the central bank could have a multiplied impact on overall liquidity due to the money multiplier effect.

"If the full Tk40,000 crore is injected by the central bank, the overall impact on the economy could be several times higher, putting additional pressure on prices," the official said.

The official added that such a move could complicate the central bank's efforts to control inflation, potentially creating a policy trade-off between maintaining price stability and supporting employment and industrial recovery.

At dawn in a small village in Bhuapur, Tangail, Alamgir Hossain used to open his poultry sheds to the clamor of thousands of chickens; now the silence inside now says more than the noise ever did.

Alamgir, who once oversaw a thriving operation producing 10,000 eggs daily, has been forced to shutter half of his sheds – the quiet has come to reflect a business he can no longer sustain. After more than two decades in poultry farming, he says the numbers no longer add up.

"It costs me around Tk10 to produce an egg, but I often have to sell it at Tk8. I can't survive with losses month after month. Many around me have already quit. I may have to shut down too."

His experience mirrors a broader strain across Bangladesh's poultry sector, where small and medium farmers are struggling to stay afloat amid rising costs and limited returns.

Industry insiders say production costs have more than doubled over the past five years: what once cost Tk100 now costs Tk210 or more. Meanwhile, Bangladesh Poultry Industries Association (BPIA) data states that growth in the sector has slowed from 4.5% to about 3.2% during the same period.

Feed has become the dominant expense, accounting for 80–85% of total production costs, according to farmers. At the same time, higher corporate taxes, advance income tax (AIT), and turnover tax have added further pressure in the current fiscal year.

Shafiqul Islam, a farmer from Bhaluka in Mymensingh, closed his 15,000-bird farm last year. "I used to buy a sack of feed for Tk2,100. Now it costs over Tk3,500. With loan instalments and electricity bills, I couldn't continue," he said. "I had to sell land to repay debts."

Rubina Akter from Monohardi in Narsingdi described a similar struggle. "I started this farm to support my daughters' education. Now I can barely run the household," she said.

Feed prices outpace market returns

Farmers say the sharp rise in feed prices has not been matched by increases in egg and chicken prices, leaving them squeezed between input costs and market rates.

Feed prices have risen by 60-65% over five years, from around Tk2,000-2,200 per sack in 2020 to Tk3,500-3,600 in 2025. In contrast, wholesale egg prices have increased by only 20-25%, from Tk6-7 to Tk8-9 per piece.

Broiler prices show a similar pattern. Wholesale prices rose from Tk120-130 per kg in 2020 to Tk140-150 in 2025 – an increase of just 15-20%, far below the rise in production costs.

"This gap is killing us," said Abdul Kader, a farmer from Chandina in Cumilla. "Feed costs have nearly doubled, but chicken prices haven't. Sometimes we can't even recover costs. Small farmers will disappear if this continues."

Tax changes deepen the strain

Farmers and industry leaders say recent tax hikes have worsened the situation.

According to the National Board of Revenue (NBR), corporate tax for poultry-related companies has been raised from 15% to 27.5% this fiscal year. AIT has increased from 1% to 5%, while turnover tax has gone up from 0.6% to 1%.

Mosharraf Hossain Chowdhury, president of the BPIA, said the effects of the tax changes have been immediate. "The tax hike has a chain effect. Feed companies have increased prices, pushing up production costs," he said.

Farmers estimate that producing one kilogram of broiler now costs around Tk146, while wholesale prices hover between Tk145 and Tk148, leaving little or no margin.

The concerns were raised before NBR Chairman Abdur Rahman Khan last month at a pre-budget meeting at the revenue board. Responding to the industry's claims, he said the tax adjustments were part of broader reform measures.

"Our goal was to rationalise the tax structure and increase revenue collection. Many sectors had long enjoyed tax benefits, which needed review," he said.

He added that the government is aware of the sector's difficulties and may consider adjustments in the next budget.

Higher taxes than regional peers

Industry leaders argue that Bangladesh's poultry sector faces a heavier tax burden than competitors in the region.

BPIA President Mosharraf said Thailand offers five to eight years of full tax exemption for feed industries, Malaysia waives sales tax on feed raw materials, India imposes no advance income tax on imports, and Nepal provides tax relief on key feed inputs.

Dr Ripon Kumar Mondal, a professor of agricultural economics at Sher-e-Bangla Agricultural University, stressed the urgency of reducing feed costs. "Without reducing feed prices, the poultry sector cannot survive. Taxes and duties on imported raw materials must be lowered," he said.

Experts have also suggested cutting corporate tax to 10% and aligning turnover tax with actual profits to help revive the sector.

According to industry leaders, an estimated 60-70 lakh people are directly and indirectly employed in the poultry sector, underlining the wider economic stakes.

Safir Rahman, secretary general of the BPIA, warned of deeper consequences if policy support does not follow. "Without policy support in the next budget, new investment will stop. Existing farmers will leave. Eggs and chicken will become unaffordable for ordinary people," he said.

For Alamgir, the crisis has already moved beyond statistics. "If we cannot survive, there will be no eggs in the market," he said. "Then what will people eat?"

On a single factory floor in Araihazar, around 200 workers – most of them women – sit in a structured production line, placing individual hair strands, sewing, and assembling frames. The finished products, high-quality customised wigs, are shipped to Japan and Singapore.

This is Artnature Bangladesh Limited, one of three companies already in production at the Bangladesh Special Economic Zone (BSEZ), a 1,000-acre industrial development jointly backed by the governments of Bangladesh and Japan, located in Narayanganj's Araihazar.

The scene on the factory floor is modest in scale but significant in signal. BSEZ, also known as the Japanese economic zone, is no longer just a plan on paper.

At least 12 local and foreign companies have secured land in the zone, with combined proposed investments of around $353.4 million. Three are already in production, while around 30 more firms from various countries are in the pipeline.

Active development work was observed during a visit to the site on 9 April. In areas where production has begun, well-constructed internal roads are in place. In plots yet to be built on, wide roads and drainage systems have already been laid.

The Bangladesh Economic Zones Authority (Beza) has handed over around 230 acres to BSEZ so far, with another 220 acres due for transfer within the year.

"The entire area has already been filled and prepared for industrial use," a Beza official said.

Investors span a broad range of industries – home appliances, textile chemicals, FMCG, food processing, hair accessories, and packaging – suggesting BSEZ is developing as a diversified industrial hub rather than a single-sector cluster.

Who are already operating

Singer Bangladesh Limited, acquired by Turkey-based Koç Group in 2019, leads in both scale and investment. Allocated 33.4 acres, the company has proposed an investment of $78 million, of which $56.3 million has already been realised.

Starting operations from 2024, it operates in the home appliances segment and represents the zone's largest single operational presence.

Japan-based Lion Kallol Limited has begun production in the FMCG sector on 8.4 acres, with $7.6 million invested out of a planned $19.4 million. Its initial product lineup includes Mama Lemon Liquid Dish Wash and Systema Toothbrush, with plans to gradually expand its household and personal care range. It began factory operations in March this year.

Artnature rounds out the trio, having realised $9 million of a planned $20 million investment on 4.9 acres. Beyond its production floor, the factory also houses research and development operations, with staff working on customised product design. Artnature began its operations in November 2025.

"We are currently operating as a 100% export-oriented company," said factory General Manager Md Tanvir Rahman. "We plan to expand into raw fiber processing in the future."

He added that while a domestic market for ready-made wigs exists in Bangladesh, Artnature targets the customised segment, an area not yet well established locally.

Who are next

Germany's Rudolf Bangladesh Limited and Japan's Nicca Bangladesh are entering the textile chemicals sector. Rudolf has invested $2.5 million of a planned $20 million, while Nicca has committed $5 million of a planned $7 million.

In food processing, UK-Bangladesh joint venture Pladis ACI Bangladesh Limited is preparing to begin construction on 7.2 acres, with $3 million invested out of a proposed $27 million.

Chinese investors are making a particularly significant push. BSN (Bangladesh) Packaging Company is planning an $80 million project on 9.3 acres, the largest single proposed investment in the zone, with $6.5 million already committed. Leaders Label Material (Bangladesh) has invested $3 million of a planned $25 million.

Sweden's Nilorn Bangladesh (U-2) Limited. has committed $15 million on 2.47 acres. Japan's Bengal Iris Takumi., specialising in textile accessories, has invested $2 million of a planned $7 million. A local Bangladeshi company has secured 5 acres, planning a $25 million investment.

The infrastructure question

For manufacturing investors, infrastructure readiness is often the difference between a signed agreement and an operational factory. On this front, BSEZ is making progress though not everything is in place yet.

Electricity supply is connected to the national grid, and a dedicated 230-kilovolt substation is under development to improve power quality and reliability. Water supply and treatment facilities are fully operational. Natural gas, critical for energy-intensive industries, is the remaining piece.

BSEZ Managing Director Chiharu Tagawa said a government-installed gas supply station has been prepared and that supply is expected to reach the zone by mid-2026.

"Once supply becomes available, it will significantly improve efficiency for energy-intensive industries," he added. Until then, the gas connection remains a limiting factor and one that investors in heavy manufacturing will be watching closely.

Post-election momentum

Tagawa said investor interest picked up significantly following Bangladesh's national election, with inquiries now coming from more than 30 companies.

"We cannot count exactly, but 30 companies from different countries – including US, China, Japan, and Korea – are now interested in BSEZ. Day by day, it is increasing," he said.

Key areas of interest include home appliances, motorcycle parts, batteries, FMCG, and consumer goods. Tagawa attributed the interest to Bangladesh's large domestic market, export potential, and the operational advantages of a dedicated economic zone.

Bangladesh Investment Development Authority (Bida) and Beza Executive Chairman Ashik Chowdhury echoed that assessment, noting that large-scale commitments tend to generate further interest.

"Such large-scale investments create a positive signalling effect. We already have several major investment proposals in the pipeline, which are under discussion. We expect significant progress in investment inflows this year," he said.

The bigger picture

BSEZ has created around 3,000 jobs to date. The long-term target is to accommodate 90-100 companies across the full 1,000 acres within the next six to seven years, with total investment expected to reach $1-2 billion.

Around 268 acres remain available for allocation. Beza Deputy Secretary Mohammad Zakaria Mithu said the focus is now on converting interest into implementation.

The ground-level reality at BSEZ today – operational factories, roads laid through empty plots, gas infrastructure nearly ready – reflects a zone that has moved past its early stage but still has most of its story left to write.

Whether the 30-plus companies in the pipeline translate into the next wave of operational companies will determine whether BSEZ becomes the industrial landmark both governments envisioned.

Bangladesh has sought expanded support from the Asian Development Bank (ADB) as geopolitical tensions, inflation, and supply chain disruptions have increased the country’s energy-related expenditures by an estimated $3 billion.

Finance Minister Amir Khosru Mahmud Chowdhury made the plea at a session of the Board of Governors at the 59th annual meeting of ADB in Samarkand, Uzbekistan.

Some 47 countries, including Bangladesh, made their presentations at the session.

The finance minister reminded participants that they are meeting at a time of heightened global uncertainty.

“Geopolitical tensions, inflation, tighter financial conditions, and supply chain disruptions are reshaping development trajectories,” he said.

For Bangladesh, a highly energy-deficient country that relies on imports, the conflict in the Middle East has further intensified energy and trade pressures.

Chowdhury said this has resulted in an estimated additional $3 billion in energy-related expenditures, raising external financing needs for the South Asian country.

“We appreciate ADB’s timely budget support for macroeconomic stability and request that countercyclical financing instruments remain available should global risks escalate,” he said.

He noted Bangladesh’s high vulnerability to climate change and urged the ADB to expand concessional climate financing as floods, cyclones, salinity intrusion, and sea-level rise continue to threaten livelihoods and infrastructure.

“We seek expanded concessional climate finance for adaptation and mitigation, including resilient infrastructure, climate-smart agriculture, disaster risk reduction, and nature-based solutions.”

As Bangladesh aims to generate 20 percent of its energy from renewable sources by 2030, he also requested ADB’s leadership in the Bangladesh Climate Development Partnership to advance renewable energy, ecosystem restoration, and river and canal rehabilitation.

He said Bangladesh remains firmly committed to reform-driven development. “Our priorities include energy and food security, financial resilience, revenue modernisation, connectivity, export diversification, digital transformation, skills, jobs, social protection, and balanced regional development.”

“We also welcome support for regional connectivity through SASEC (South Asia Subregional Economic Cooperation) and wider links among SAARC and with ASEAN countries to strengthen supply chains and expand trade and investment opportunities,” he said.

He stressed the mobilisation of private capital and blended finance, renewable energy, urban development, and digital development for stronger regional crisis response capacity and deeper energy cooperation.

Bangladesh also emphasised enhanced support for AI readiness and future skills, and greater focus on job creation in emerging sectors.

Chowdhury also cited Bangladesh’s challenges in hosting a significant population of forcibly displaced Myanmar nationals on humanitarian grounds and sought ADB’s enhanced support for both displaced populations and host communities.

The finance minister sought ADB’s continued support for timely project delivery and capacity building.

He said Bangladesh encourages ADB to support transformative investments that deepen the country’s regional connectivity, modernise infrastructure, ensure energy security, and strengthen digital and logistics capacity.

“This can boost productivity, unlock the potential of our north-south corridors, create jobs in emerging industries, and reduce poverty and regional disparities.”

Saudi Arabia, Russia and five other OPEC+ countries increased their oil production quota on Sunday in an expected move aimed at demonstrating continuity at the cartel after the shock withdrawal of the United Arab Emirates.

The seven major producers will add 188,000 barrels per day to their total production quota for June amid the price pressure unleashed by the Mideast war, as part of "their collective commitment to support oil market stability", according to a statement published by OPEC+.

The statement, following an online meeting of Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia and Saudi Arabia, made no mention of the United Arab Emirates, which quit the body on Friday, three days after announcing its withdrawal.

Rystad Energy analyst Jorge Leon told AFP that the silence on the UAE's departure was a sign of tense relations.

Oil market analysts had widely expected the increase of 188,000 barrels, similar to the 206,000-barrel daily increases OPEC+ announced in both March and April when the portion allotted to the UAE was subtracted.

"By sticking to the same production path -- just minus the UAE -- it's acting as if nothing has happened, deliberately downplaying internal fractures and projecting stability," Leon said.

Strait of Hormuz bottleneck remains

But raising the quota on paper may not have much impact on actual production, which is already short of the limit.

Untapped OPEC+ reserves are mainly located in the Gulf region, and exports there are trapped by the blockade of the vital Strait of Hormuz, imposed by Iran in response to the US-Israeli strikes that started the war on February 28.

Leon, the Rystad Energy analyst, told AFP on Sunday that the cartel was looking to send "a two-layer message" that the UAE's exit would not disrupt how OPEC+ operates and that the group still exerts control over global oil markets despite massive disruption to oil trade due to the war.

"While output is increasing on paper, the real impact on physical supply remains very limited given the Strait of Hormuz constraints," Leon told AFP. "This is less about adding barrels and more about signalling that OPEC+ still calls the shots."

The Strait of Hormuz blockade is hitting Iraq, Kuwait, Saudi Arabia and the UAE. The latter's production will no longer count towards OPEC quotas.

"Total OPEC+ output with quota fell to 27.68 million bpd in March, against a monthly quota of 36.73 million bpd, a shortfall of approximately 9 million bpd driven almost entirely by war-related disruption rather than voluntary restraint," said Priya Walia, another analyst at Rystad Energy, ahead of Sunday's meeting.

Iran, whose exports are now the target of a retaliatory US blockade, is an OPEC+ member but is not subject to quotas.

Russia, the group's second-biggest producer, has been the main beneficiary of the situation. But despite soaring energy prices, it appears to be struggling to produce at the level of its current quotas as its own war in Ukraine drags on and Ukrainian drones hit oil industry facilities.

'A big deal'

Amena Bakr, an analyst at Kpler, described the UAE's exist as "a big deal" for OPEC.

Previous withdrawals from the group by Qatar in 2019 and Angola in 2023 were less significant by comparison, Bakr told a video conference on the UAE withdrawal.

The UAE has invested massively in infrastructure in recent years, and state-owned oil company ADNOC plans to increase output by five million barrels a day by 2027 -- far above the country's last quota of around 3.5 million barrels.

ADNOC also pledged on Sunday to spend $55 billion on new projects over the next two years, confirming that the company is "accelerating growth and delivery of its strategy".

There is also the risk for OPEC+ that other countries will leave such as Iraq and Kazakhstan, which have faced repeated accusations of surpassing their quotas.