OPEC+ agreed on ‌Sunday a modest oil output hike for June, an increase that will remain largely on paper as long as the Iran war continues to disrupt Gulf oil supplies through the Strait of Hormuz.

Seven OPEC+ countries will raise oil output targets by 188,000 barrels per day in June, the third consecutive ​monthly increase, OPEC+ said in a statement after an online meeting. The increase is the same as that agreed ​for May minus the share of the United Arab Emirates, which on May 1.

The ⁠move is designed to show the group is ready to raise supplies once the war stops and signals that OPEC+ is ​pressing on with a business-as-usual approach despite the departure of the UAE from OPEC+, OPEC+ sources and analysts said.

"OPEC+ is sending a ​two-layer message to the market: continuity despite the UAE's exit, and control despite limited physical impact," said Jorge Leon, an analyst at Rystad and former OPEC official.

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

Top OPEC+ producer Saudi Arabia's quota will rise ​to 10.291 million bpd in June under the agreement, far above actual production. The kingdom reported actual production of 7.76 million bpd to ‌OPEC in ⁠March.

The seven members who met on Sunday were Saudi Arabia, Iraq, Kuwait, Algeria, Kazakhstan, Russia, and Oman. With the UAE leaving, OPEC+ includes 21 members including Iran. But in recent years only the seven nations plus the UAE have been involved in monthly production decisions.

HIKE REMAINS LARGELY SYMBOLIC UNTIL HORMUZ RE-OPENS

The Iran war, which began on February 28, and the resulting closure of the ​Hormuz strait have throttled exports from ​OPEC+ members Saudi Arabia, ⁠Iraq and Kuwait, as well as from the UAE. Before the conflict, these producers were the only countries in the group able to raise production.

Even when shipping through the Strait of Hormuz ​reopens, it will take several weeks if not months for flows to normalise, oil executives from ​the Gulf and ⁠global oil traders have said.

The supply disruption has propelled oil prices to a four-year high above $125 per barrel as analysts begin to predict widespread jet fuel shortages in one to two months and a spike in global inflation.

Crude oil output from all OPEC+ members ⁠averaged 35.06 ​million bpd in March, down 7.70 million bpd from February, OPEC said in ​a report last month, with Iraq and Saudi Arabia making the biggest cuts due to constrained exports.

The seven OPEC+ members will meet again on June 7, ​the statement said.

Sri Lanka raised fuel prices by nearly 4% today (3 May), further fuelling inflation, which more than doubled last month due to the Middle East war.

Since March, Sri Lanka has raised fuel prices by more than 35%, while gas and electricity rates have also increased by a similar amount.

The island has also rationed fuel following supply disruptions.

Today, the state-owned Ceylon Petroleum Corporation increased the price of kerosene -- used by agricultural machinery -- to 265 rupees ($0.85) a litre, up 10 rupees.

Petrol rose 12 rupees to 410 rupees ($1.32). Diesel was up 10 rupees to 392 rupees.

Higher energy prices pushed inflation to more than double, reaching 5.4% in April, according to official data.

Fuel and electricity tariffs drove up transport costs as well as food prices, the Department of Census and Statistics said.

The island has been slowly emerging from the 2022 economic meltdown, when it ran out of foreign exchange reserves to pay for essential imports such as food, fuel and medicines.

However, it was hit hard in November by a cyclone that killed at least 643 people and affected more than 10% of the island's 22 million population.

The storm caused an estimated $4.1 billion in direct physical damage to buildings and agriculture, according to the World Bank.

The country has been stabilising its fragile economy with the help of a $2.9 billion IMF bailout agreed in early 2023, but high energy prices have seriously challenged recovery efforts.

Bangladesh received $3.12 billion in remittances in April, a 13.5% increase from the same month a year earlier, according to data released by Bangladesh Bank today (3 May).

In April last year, expatriates sent $2.75 billion in remittances.

However, inflows retreated from March's record high of $3.75 billion, with bankers attributing the surge largely to a seasonal spike in transfers ahead of Ramadan and Eid-ul-Fitr.

Despite the monthly decline, remittances have remained above the $3 billion mark for five consecutive months. Bankers see this as a positive sign for the economy, pointing to greater use of formal channels and stronger earnings by migrant workers.

In the current fiscal year 2025-26, remittances have maintained robust growth, helping to bolster foreign exchange reserves. Between July and April, total inflows reached $29.33 billion, up 19.5% from $24.54 billion in the same period a year earlier.

Economists say the rising inflows could help ease pressure on the external sector, support exchange rate stability and strengthen overall macroeconomic conditions if the trend holds in the coming months.

They expect remittances to increase further in May, driven by the upcoming Eid-ul-Adha at the end of the month.

Bankers noted that a narrowing gap between exchange rates in the informal market and official banking channels has encouraged expatriates to send money through formal means.

Bangladesh Bank has been purchasing US dollars from commercial banks through auctions, buying more than $4 billion so far in the 2025-26 fiscal year as of early February, in a bid to stabilise the foreign exchange market and build reserves.

The exchange rate has recently hovered between Tk122.75 and Tk122.90, as authorities seek to prevent excessive appreciation of the taka while supporting remittances and export earnings.

Earlier, despite a decline in exports, rising imports and the onset of war, the exchange rate remained stable at Tk122.75 per US dollar.

Foreign exchange reserves currently stand at $35.10 billion, or $30.47 billion under the IMF's BPM6 method.

Following a payment of $1.37 billion to the Asian Clearing Union (ACU) on 9 March, reserves had fallen to $34.10 billion, with the BPM6 measure at $29.38 billion.

Bangladesh's reserves had reached a historic high of more than $48 billion in August 2021.

They later dropped to $20.48 billion under the BPM6 method and $25.92 billion in gross terms by the time of the fall of the Awami League government. During the 18-month tenure of the interim government, reserves have increased by $10 billion.

The Dhaka Stock Exchange (DSE) witnessed a significant retreat today (3 May) as a massive sell-off in the banking sector, triggered by the formal downgrade of ten more lenders to the "Z" category, dragged down the benchmark index.

The premier bourse felt the immediate impact of investor panic as nearly 42% of the country's listed banking sector shifted into the "junk" stock segment, a move that severely eroded market sentiment and tightened liquidity across the floor.

The benchmark DSEX index plunged by 21 points, or 0.40%, to settle the session at 5,265. While the blue-chip DS30 index managed to edge up by a marginal 0.09% to reach 2,018, the broader market breadth remained negative. Out of the 396 issues traded, 180 declined, 165 advanced, and 51 remained unchanged.

Market participation also saw a slight contraction, with daily turnover edging down by 4% to Tk829 crore compared to the previous session.

The day's downturn was almost entirely dictated by the banking sector. Market sources confirmed that ten banks – AB Bank, Al-Arafah Islami Bank, IFIC Bank, Mercantile Bank, NRB Bank, NRBC Bank, One Bank, Premier Bank, Rupali Bank, and United Commercial Bank – were moved to the "Z" category on Sunday.

This followed their failure to declare any dividends for two consecutive years, a direct consequence of persistent financial irregularities and mounting bad loans. This latest wave of downgrades follows a similar move on 30 April, when Islami Bank, Standard Bank, and SBAC Bank were also pushed into the junk category for the same reasons.

Among the newly downgraded entities, Mercantile Bank suffered the most brutal correction, with its share price crashing by 18.18% to close at Tk7.20. AB Bank followed with an 11.32% decline, ending the day at Tk4.70.

Other notable losers included Premier Bank, which shed 8.89% to settle at Tk4.10, and IFIC Bank, which dropped 6.12% to close at Tk4.60. Al-Arafah Islami Bank, NRB Bank, and One Bank also saw their share values erode by more than 4% each. Even the state-owned Rupali Bank recorded a 2.91% price fall.

Consequences of Z category

Analysts said the primary reason behind this unprecedented sector-wide dividend drought is a massive provision shortfall against classified loans and investments. Under Bangladesh Bank regulations, lenders suffering from provision deficits are strictly prohibited from declaring dividends.

To maintain a semblance of regulatory compliance and prepare audit reports, several of these banks have reportedly availed deferral facilities from the central bank. While this allows them to postpone their immediate financial obligations, it does nothing to improve their actual profitability or their ability to reward shareholders, effectively trapping them in the junk category.

The transition to the "Z" category carries severe operational and psychological consequences for a listed firm. These stocks are widely perceived as high-risk assets due to their weak financial health and lack of corporate governance, analysts added.

Furthermore, trading rules for junk stocks are significantly more restrictive. Unlike "A" and "B" category stocks, which follow a T+2 settlement cycle, "Z" category transactions are settled on a T+3 basis.

Additionally, these shares are ineligible for margin loans and are restricted to cash-only transactions. These barriers often lead to a sharp decline in trading volume and liquidity, making it difficult for investors to exit their positions.

With 15 out of the 36 listed banks now trading in the "Z" category, the systemic health of the banking sector has become a major concern for the capital market.

Few outliers

Among the affected lenders, only a few managed to resist the downward trend today. The share prices of UCB and Standard Bank remained unchanged, while NRBC Bank emerged as the sole outlier in the sector, managing to post price appreciation despite the broader sell-off.

The banking rout mirrored the performance of the Chittagong Stock Exchange as well. The CSCX index ended 7 points lower at 9,086, while the CASPI shed 17 points to close at 14,788. Turnover at the port city bourse saw a more pronounced decline of 14%, settling at Tk41.35 crore.

Major index draggers for the day included Mercantile Bank, Shahjalal Islami Bank, Trust Bank, NCC Bank, and Al-Arafah Islami Bank.

NBFIs gain traction

Interestingly, while established banks faced a rout, the gainers' list today was dominated by non-bank financial institutions (NBFIs), many of which are themselves grappling with high non-performing loans and governance crises.

Speculative trading appeared to drive these stocks higher, with Fareast Finance and Bangladesh Industrial Finance Company (BIFC) both hitting the 10% upper limit. Other gainers included International Leasing, Premier Leasing, FAS Finance, and Peoples Leasing.

Market observers described this as a classic case of speculative 'junk-hunting' where investors shift capital into low-priced, volatile stocks following a crash in more fundamental sectors like banking.

The government has authorised BRAC Bank PLC and Pubali Bank PLC to act as primary dealers (PD) for government securities for a three-year term, which will officially commence from the first working day of May this year.

The appointment was formalised by the Bangladesh Bank today (30 April) following a directive from the Finance Division of the Ministry of Finance.

With this appointment, both banks will now share the bidding obligations currently performed by 24 existing primary dealer banks in the auctions for government treasury bills and bonds.

As primary dealers, these banks are mandated to participate in auctions to help finance the government's budget deficit, ensuring a steady flow of funds through the sovereign debt market.

According to the letter from the finance ministry, the authorisation was granted under the provisions of the 'Guidelines for Enlistment and Operations of Primary Dealers in Government Securities, 2025 (Amended)'.

Islami Bank Bangladesh PLC, SBAC Bank and Standard Bank have been downgraded to the Z category for failing to declare dividends for the last two consecutive years.

According to the Dhaka Stock Exchange, brokerage firms and merchant banks have been instructed not to provide margin loans against the shares of these banks.

Following the downgrade, the share prices of the three banks fell sharply in the opening session today (30 April).

The vast majority of Bangladesh’s workforce remains in marginal conditions, outside the reach of formal labour protections, experts warned yesterday, calling for a shift in policy focus beyond the garment sector.

Around 85 percent of workers are engaged in the informal sector with little regulation or protection, Syed Sultan Uddin Ahmmed, former chairman of the Labour Reform Commission, said at a May Day discussion in Dhaka.

The programme, held at the Economics Reporters Forum office, was organised by the Network for People’s Action (NPA), a newly formed political party.

At the event, Ahmmed also noted that the dominance of ready-made garments (RMG) in national and international labour discourse obscures a far wider problem.

“As an export-oriented industry, the RMG sector remains at the centre of national and international discussion. While this sector is important, it should not overshadow the broader reality,” he said.

A stronger industrial base and labour movement in large sectors could eventually benefit workers in other areas, he said, calling for a more inclusive labour perspective.

“Sanitation workers, day labourers and informal workers continue to live in precarious conditions,” said the labour policy expert.

He added, “We celebrate long holidays, but for day labourers, even a few days without work can mean going without food… Yet there is no universal social security system to protect them.”

Ahmmed also criticised existing social protection measures as charity-driven rather than rights-based. “The fact that a single rainy day can leave a labourer’s family without food rarely enters policy thinking.”

Echoing the same, Prof Selim Raihan, executive director of the South Asian Network on Economic Modeling (Sanem), said the garment sector’s export growth had not translated into proportional gains for workers.

“Productivity has increased over the decades, yet real wages have lagged. That disconnect tells us something fundamental about the structure of our growth,” he said.

Raihan also pointed to a persistent narrative that stronger labour rights would hurt competitiveness. “This (narrative) has often been used to discourage workers from organising or demanding more.”

He added that labour discussions in Bangladesh too often stop at minimum standards.

“We rarely move beyond ensuring the bare minimum to discussing living wages or broader social protections,” he said.

Among others, Taslima Akhter, president of the Bangladesh Garment Sramik Samhati, also spoke at the event.

India and Bangladesh are taking steps to normalise bilateral relations by moving towards the full resumption of visa services, following a period of strained ties and restricted travel.

Bangladesh has already resumed issuing visas to Indian citizens across all categories, including tourism, business and medical travel, while India is aiming for a gradual restart of its visa operations over the coming weeks, says the Indian Express.

Indian visa services for Bangladeshi nationals are currently operating at 15–20% of their pre-December 2025 capacity, with priority given to medical cases and family emergencies. In contrast, Bangladesh has issued more than 13,000 visas to Indians since restoring operations around 20 February 2026.

The move follows a period of political upheaval after the August 2024 ouster of former prime minister Sheikh Hasina. Relations are being recalibrated under the new government of Prime Minister Tarique Rahman, whose swearing-in in February 2026 was attended by an Indian delegation.

Travel between the two countries had declined sharply amid tensions and visa curbs. The number of Bangladeshi visitors to India fell from 2.12 million in 2023 to 470,000 in 2025.

Officials in both countries have indicated that efforts to restore visa services are part of broader attempts to rebuild cooperation, including through high-level political engagement and closer economic and energy ties.

India recently transported diesel to Bangladesh to help ease energy shortages linked to the war in West Asia.

The expected arrival of India's new High Commissioner to Bangladesh, Dinesh Trivedi, is seen as a step that could facilitate the return to full-scale visa operations.

The parliament yesterday (30 April) passed two separate bills removing the maximum age limits for the post of chairmen and commissioners of the Bangladesh Securities and Exchange Commission (BSEC), as well as the chairman and members of the Insurance Development and Regulatory Authority (IDRA).

Previously, the age limits stood at 65 years for the BSEC and 67 years for the IDRA. With the passage of these amendments, the government will now be able to appoint individuals of any age to lead these two key financial regulatory bodies.

Finance Minister Amir Khosru Mahmud Chowdhury, who moved the bills, argued that the amendments were intended to make the laws more time-appropriate by allowing the recruitment of highly qualified, experienced, and skilled professionals.

He said that when the securities law was originally enacted in 1993, the average life expectancy in Bangladesh was around 57 years, whereas it now stands at 72 years. He stated that retaining the earlier age limits would prevent capable individuals from contributing effectively to the financial sector.

However, the bills faced strong resistance from opposition and independent lawmakers.

Independent lawmaker Rumeen Farhana called for the bills to be opened to public scrutiny, highlighting that retail investors suffered massive losses during the 1996 and 2010 market crashes, while over Tk1 lakh crore was allegedly siphoned off over the past 15 years.

Opposition lawmaker Akhter Hossen questioned whether the amendment was genuinely intended to find capable leaders or merely to facilitate the appointment of favoured individuals. Leader of the Opposition Shafiqur Rahman alleged that lawmakers were not given adequate time to review the documents.

Despite the opposing calls to send the bills to a standing committee for further review, the bills were ultimately passed by voice vote.

The Bangladesh Bank (BB) has waived the requirement to maintain provisions against funds of banks and non-bank financial institutions stuck in five merging shariah-based lenders.

The decision was taken at a recent internal meeting of the central bank, officials familiar with the matter said, at a time when more than Tk 15,000 crore remain tied up in the troubled institutions.

As these funds have not been recovered for a prolonged period, the regulator has lifted the requirement to maintain provisions against them, they added.

The five merging banks are First Security Islami Bank, Global Islami Bank, Union Bank, Social Islami Bank, and Exim Bank. They were brought under the merger process by the interim government through the Bank Regulation Ordinance, 2025.

Around Tk 10,000 crore of the stuck funds belong to Islami Bank Bangladesh alone.

Banks are required to set aside 0.5-5 percent of operating profit against general category loans, rising to 20 percent for substandard loans, 50 percent for doubtful loans, and 100 percent for bad or loss category loans.

Initially, the BB’s bank supervision departments and the financial institutions and markets department had instructed banks to maintain provisions against funds stuck in the troubled banks.

The Bank Resolution Department (BRD) later clarified that such provisioning would not be required, as the funds fall under a specific resolution framework.

“The funds are not considered a total loss. Banks may receive shares after a certain period or recover the money with profit after five years,” a central bank official said, adding that the BRD has provided assurances in this regard.

Affected institutions are expected to either recover the money directly or receive equivalent value through long-term fixed deposits or shares, said the official.

The five banks were previously controlled by politically connected figures. During the Awami League-led government, Exim Bank was under Nazrul Islam Mazumder, former chairman of the Bangladesh Association of Banks. The other four were controlled by family members of Mohammed Saiful Alam, chairman of S Alam Group.

Allegations of widespread irregularities and fund embezzlement during that period led to severe liquidity crises, leaving the banks unable to repay depositors and institutional lenders.

As of September 2024, the total investment or loans of those five banks stood at Tk 1,92,787 crore, while total deposits stood at Tk 1,58,918 crore, BB data show.

Japanese Prime Minister Sanae Takaichi vowed on Saturday to strengthen bilateral ties with Vietnam, with energy cooperation and critical minerals at the forefront, during a meeting with Vietnamese Prime Minister Le Minh Hung.

The pledge came as new Japanese investment in Vietnam fell about 75% year-on-year to $233 million in the first quarter, even as bilateral trade rose 12.3% to $13.7 billion over the same period, according to Vietnamese government and customs data.

The two leaders discussed ways to deepen the Comprehensive Strategic Partnership established in 2023, focusing on energy, critical minerals, artificial intelligence, semiconductors and space.

"The two sides identified economic security as a new priority area for bilateral cooperation," Takaichi told reporters after the meeting.

"With regard to critical minerals... both sides agreed to strengthen close coordination to ensure stable supplies and reinforce supply chains," she added.

In a joint move, Vietnam and Japan signed six agreements encompassing infrastructure, climate action, agriculture, technology, digitalisation and space cooperation.

Japan remains one of Vietnam's largest foreign investors, with many Japanese multinationals operating large manufacturing facilities in the country.

Vietnam has been seeking support from Japan and other countries for oil supplies as conflict in the Middle East drives prices higher and disrupts supply chains.

Under the $10 billion Power Asia Initiative to support Asian countries' energy self-reliance, Japan will assist in arranging crude oil supplies for Vietnam's Nghi Son Refinery and Petrochemical Complex, Hung said.

Takaichi was also set to meet Vietnam's Party Secretary and President To Lam on Saturday afternoon and deliver a keynote speech at Vietnam National University, marking a decade since former Prime Minister Shinzo Abe introduced Japan's "Free and Open Indo-Pacific" strategy.

Her address is expected to emphasise autonomy and resilience for regional nations.

Vietnam supports Japan's regional initiatives, including the Free and Open Indo-Pacific Vision, aligned with the ASEAN Outlook on the Indo-Pacific, in accordance with international law and "contributing positively to peace, stability, cooperation and development in the region and beyond," Hung said.

Russia's Deputy Prime Minister Alexander Novak said on Thursday that the OPEC+ group of leading oil producers would continue working together despite the departure of the United Arab Emirates, Russian news agencies reported.

According to the reports, Novak said he did not expect an oil price war to emerge following the UAE's exit given a global oil deficit.

The UAE said on Tuesday it was quitting OPEC, dealing a blow to the oil producers' group as an unprecedented energy crisis triggered by the Iran war exposes discord among Gulf nations.

The UAE was the fourth-largest producer in OPEC+, which comprises OPEC and its allies, while Russia is second, behind Saudi Arabia.

"In the current situation, it is hard to talk about a price war when there is a shortage in the market. What we are seeing instead is the deepest crisis in the industry," Novak was quoted as saying by Interfax news agency.

"Large volumes of oil are not reaching the market today, while demand significantly exceeds supply. This has created an imbalance due to serious logistical disruptions, including the situation in the Middle East," Novak said according to Interfax.

Novak also reiterated that Russia will remain in OPEC+, which was formed in 2016.

Bangladesh cited gaps in readiness, incomplete core reforms, and economic fallout from the Iran war as reasons for seeking an extension of the transition period for graduation from the least developed country (LDC) category by three more years at the public hearing of the UNCDP on April 29.

Commerce Minister Khandakar Abdul Muktadir attended the virtual hearing with Chair of the United Nations Committee for Development Policy (UNCDP) José Antonio Ocampo, Additional Commerce Secretary Md Abdur Rahim Khan told The Daily Star.

Khan also said the UNCDP wanted to know the reasons why Bangladesh is seeking an extension of the transition period for LDC graduation.

Bangladesh mainly cited the country’s gap in preparedness, lower implementation of core reforms, and the fallout of the US-Israel war on Iran as the main reasons for the requested extension, the additional secretary said.

Apart from these three main reasons, Bangladesh also mentioned vulnerabilities in the financial sector, weaknesses in the banking system, an export slowdown due to volatile global supply chains, high interest rates, and an uncertain business and investment climate in support of the extension, he said.

Bangladesh is scheduled to graduate from LDC status on November 24 this year, but it has sought to delay the transition until 2029, citing domestic and external economic pressures.

The UNCDP will prepare a report on Bangladesh’s hearing and submit its recommendations to the United Nations Economic and Social Council (ECOSOC) in June.

The ECOSOC will then forward its assessment to the United Nations General Assembly (UNGA), scheduled to meet in September, where a vote will finalise the decision on the deferment.

Earlier, on February 19, the newly elected government sent a letter to the chair of the UNCDP, requesting that the preparatory period be extended until November 24, 2029, mentioning that more time is needed to ensure readiness.

Following Bangladesh’s request, the UNCDP discussed the issue at its annual meeting in February and agreed on a process to assess the proposal.

The business community of the country has also been requesting both the incumbent government and the immediate past interim government to delay the LDC graduation, as they need more time to prepare adequately. They said higher bank interest rates and political transition in the country, following massive unrest and political upheaval, have also affected the economy significantly.

A UN assessment report in March stated that Bangladesh still faces serious gaps in its readiness for graduation, as its economy continues to be affected by both domestic and international shocks, including the US-Israel war on Iran.

The report highlighted a series of disruptions between 2017 and 2026, including climate vulnerability, the Rohingya crisis, a prolonged macroeconomic slowdown that predated the regime change, the Covid-19 pandemic, the Russia-Ukraine war, inflation, and pressure on the balance of payments.

It also noted that while Bangladesh meets all three criteria for graduation, significant risks persist, including the loss of trade preferences, fiscal and financial vulnerabilities, and weak institutional coordination.

Rising import costs for fossil fuels have created operational constraints, with gas shortages worsening due to the Middle East conflict, the report said.

Economic growth slowed from 7.1 percent in FY22 to 3.5 percent in FY25, weakening momentum ahead of graduation.

Inflation has outpaced wages, pushing millions into hardship and vulnerability.

A recent UN Trade and Development assessment estimated that Bangladesh could lose more than $17.5 billion in annual exports after graduation.

Rice supply is expected to fall this year as farmers cut planting acreage across Asia because of fertiliser shortages and soaring fuel costs ​from the Iran war, with an emerging El Nino also set to squeeze output of the world’s most consumed staple.

Rice is central to global food security, ‌and even modest supply disruptions can ripple through countries, lifting prices and straining household budgets, particularly among price-sensitive consumers in Asia and Africa. The UN Food and Agriculture Organization in April forecast rice output would expand by 2 percent to a record high in 2025/26.

The effects of the Iran war are impacting farmers in top exporters Thailand and Vietnam as well as the import-reliant Philippines and Indonesia, growers and traders said. The war has cut fuel and fertiliser ​flows through the Strait of Hormuz, a key chokepoint that connects the Gulf to global markets.

Rice is central to global food security, ‌and even modest supply disruptions can ripple through countries, lifting prices and straining household budgets, particularly among price-sensitive consumers in Asia and Africa
Southeast Asia’s mainly smallholder farmers also face mounting stress as the El Nino ​weather phenomenon is set to usher in hotter, drier conditions for the region in the second half of the year.

“Farmers have already started planting rice in some countries and are using fewer inputs because prices have gone up,” said Maximo Torero, chief economist at the UN FAO. “We are going to see a tighter global supply situation ​in the second half of the year and early next year.”

In 2008, export curbs by key suppliers more than doubled prices to about $1,000 a metric ton , triggering unrest in several countries. More recently, ​supply tightness in 2022 to 2023, exacerbated by India’s export restrictions, lifted prices and prompted panic buying.

SUPPLY-CHAIN DISRUPTION

Rice shipments are already facing supply-chain bottlenecks.

“Logistics have become a nightmare, especially in Asia as there is shortage of polypropylene bags, limited truck availability to move rice to ports and shipping itself has been disrupted,” said a Singapore-based trader at a top global rice merchant, who asked to remain unidentified as they are not authorized to speak ​to media.

While fertiliser shortages and dryness are already curbing yields of smaller crops being harvested in Southeast Asia, the next crop will likely face a bigger reduction.

India, Thailand and the Philippines plant ​their main crops in June and July, while Vietnam and Indonesia are now sowing their second-season crops.

Most Asian producers grow two or three rice crops a year.

FARMERS CUT PLANTING

Sripai Kaew-Eam, a 60-year-old farmer in Thailand’s ‌Chai Nat province about 151 km (94 miles) north of Bangkok, said high fertiliser and fuel prices have pushed production costs to about 6,000 baht ($183.99) per rai (0.4 acre), from around 4,500 to 5,000 baht for the previous crop, while the price she receives for the unhusked rice she harvests is about 6,200 baht per metric ton.

Fertiliser prices have risen to 1,000 to 1,200 baht per bag, from 850 baht, forcing her to cut her use by half.

“Fertiliser prices are high, fuel prices are high,” she said.

The Philippines, the world’s biggest rice importer, faces a similar situation.

“Some farmers are now saying they may ​not plant or will reduce fertiliser use, which ​would inevitably cut production,” said Arze Glipo, executive director of the Integrated Rural Development Foundation.

The country’s output could fall by as much as 6 million tons from its typical 19 million to 20 million.

“That would leave the Philippines in a precarious position, as imports are also uncertain due to export restrictions, making it extremely difficult to ​cover any production shortfall,” Glipo said. In Indonesia, fertiliser supply is not a constraint but the El Nino is expected to curb output.

Indonesia’s statistics ​bureau estimates the rice harvest area in the March to May period will shrink by 10.6 percent to 3.85 million hectares (9.5 million acres), while unhusked rice production will drop 11.12 percent to 20.68 million tons.

Despite the supply worries, the world has ample rice inventories following years of bumper output, with India, the world’s biggest exporter, holding a record 42 million tons or about one-fifth of global stockpiles, according to US Department of Agriculture data, cushioning any drop in ​global production.

Most rice grade prices are currently steady but will likely rise even if the Hormuz situation were resolved ​immediately, the FAO’s Torero said.

Opening the strait soon would avoid a major supply issue but “if we don’t reopen this in the next two to three weeks, the situation is going to get pretty serious,” he said.

More than half of the country’s scheduled banks will not be able to pay dividends this year, as rising bad loans and provisioning shortfalls continue to erode their financial strength.

This follows a dividend payout policy introduced by the Bangladesh Bank (BB) in March last year, which has tightened eligibility rules for profit distribution.

Under the policy, banks using provisioning deferrals are not allowed to issue dividends from 2024. From 2025 onwards, commercial lenders with non-performing loans (NPLs) above 10 percent of their total loan portfolio are also disqualified, regardless of profitability.

As of December last year, 29 banks, both state-owned and private, had double-digit NPL ratios. This accounts for nearly half of all scheduled banks. Of them, 17 listed lenders will be unable to pay dividends this year solely due to high defaulted loans.

Banks are required to finalise their balance sheets by April 30 under regulatory rules, and many have already announced dividend plans.

However, the central bank has withheld approval for more than 20 banks due to high levels of bad loans and the use of deferral facilities to meet provisioning requirements.

Some lenders even met the BB governor seeking approval, but failed to secure permission.

All state-owned banks are ineligible to pay dividends because of their high bad loan ratios. These include Krishi Bank, Agrani Bank, Janata Bank, Sonali Bank, Rupali Bank, Rajshahi Krishi Unnayan Bank, Probashi Kallyan Bank, BASIC Bank and Bangladesh Development Bank.

A large number of private commercial banks have also failed to qualify.

These include AB Bank, Modhumoti Bank, NRBC Bank, Al-Arafah Islami Bank, Standard Bank, One Bank, IFIC Bank, Islami Bank Bangladesh, ICB Islamic Bank, NRB Bank, Mercantile Bank, Global Islami Bank, EXIM Bank, First Security Islami Bank, Social Islami Bank, Union Bank, SBAC Bank, Padma Bank, United Commercial Bank, Shimanto Bank, National Bank, Premier Bank, Meghna Bank, Bangladesh Commerce Bank and Citizens Bank.

They have been disqualified due to elevated bad loans and reliance on provisioning deferral facilities. Some of these banks are still seeking approval to declare at least stock dividends and are continuing discussions with the central bank.

Tarek Reaz Khan, managing director and chief executive of NRB Bank PLC, said the bank will not be able to declare a dividend this year due to the BB policy.

“We are reducing our provisioning shortfall, and other financial indicators of the bank are improving,” he added.

Sharif Zahir, chairman of United Commercial Bank (UCB), said the bank’s financial position is improving.

“We submitted a three-year plan to the central bank and are working in line with it. However, we are still unable to pay dividends this year,” he said.

Md Touhidul Alam Khan, managing director of NRBC Bank, said the lender has improved across several indicators, including governance, but is unable to pay dividends due to the use of provisioning deferral facilities.

As per the BB rules, a bank may only pay cash dividends from the net profit of the relevant financial year and cannot use accumulated profits. Even then, payouts are capped at 30 percent of paid-up capital or 50 percent of net profit, whichever is lower.

Despite the restrictions, a small group of listed banks have declared dividends.

These include City Bank, BRAC Bank, Pubali Bank, Dhaka Bank, Uttara Bank, Eastern Bank, Prime Bank, NCC Bank, Dutch-Bangla Bank, Mutual Trust Bank, Bank Asia, Jamuna Bank, Shahjalal Islami Bank, Southeast Bank, Trust Bank and Midland Bank.

Outside of the listed category, Community Bank and Bengal Commercial Bank have declared dividends.

US President Donald Trump’s war with Iran was always unpopular at home. What made it tenable is that the American economy, buoyed by oil exports and an artificial-intelligence boom, ​seemed almost recession-proof. With the Strait of Hormuz still disrupted, however, even the world’s largest economy needs to reckon with ‌the possibility of a downturn.

Until recently, economic forecasts were relatively benign, especially for the United States. When the International Monetary Fund (IMF) updated its global projections earlier this month, its so-called baseline scenario still had world output expanding 3.1 percent this year. Only under its “severe scenario,” which assumed crude prices averaging $110 per barrel in 2026 and $125 in 2027, ​did the IMF foresee global growth falling below 2 percent, a pace consistent with outright contractions in many countries.

That hypothetical future no longer ​feels far-fetched. The key Brent crude oil price has traded persistently above $110 per barrel over the past week, even briefly surpassing $120 on Thursday.

On Thursday, official data showed a rebound in US GDP in the first quarter: output expanded at an annual 2 percent. ​This is far above growth rates in the euro zone and the United Kingdom. American unemployment, at 4.3 percent, remains low.

Consider the 1990 Gulf War, though. ​The US economy enjoyed solid growth and near-full employment at the time. But labour demand was softening and households were starting to get worried amid the savings and loan crisis. When oil prices surged 150 percent, consumer confidence collapsed and real-terms spending stalled. The Federal Reserve, constrained by rising inflation, was slow to ease policy.

Many ​of those conditions are echoed today, including a divided Fed likely to resist pressure from its new chair to cut rates. Surveys already show depressed ​consumer sentiment and higher inflation expectations.

Comparing oil shocks across decades is complicated by the fact that richer households now spend a smaller share of income on energy. In ‌recent years, energy goods and services have accounted for less than 4 percent of US disposable income, compared with about 5 percent before the Gulf War and 6 percent ahead of the 1970s crises.

One way to bridge that gap is to examine how much households are forced to raise that share when energy prices jump. One rule of thumb is that a 1 percent increase in American WTI oil prices typically lifts energy spending by roughly 0.22 percent. After July ​1990, the energy share of household ​incomes rose by about 0.3 percentage points, enough to tip the economy into recession, since higher energy bills forced consumers to cut spending elsewhere.

A shock of a similar size would emerge today if crude prices stayed where they are. And if oil ​hits $150 per barrel, the increase in the energy share would be 0.7 percentage points of disposable income. ​With oil at $200 per barrel, it would rise by a full percentage point. That would still be milder than the 1970s, but enough to hurt badly. Though far from certain, every new day makes a US recession look less outlandish.

US President Donald Trump will receive a briefing on April 30 regarding plans ​for new military operations in Iran, according to a report by Axios. It triggered ​renewed fears among traders of a monthslong standoff in the Middle East, sending oil prices up.

As of 1145 GMT on April 30, Brent crude and US WTI futures were trading ​at $114 per barrel and $104 per barrel respectively.

President Donald Trump said Friday that he will hike US tariffs on cars and trucks from the European Union next week, charging that the bloc is not complying with an earlier trade deal.

The pact, which was struck last summer, had capped the US tariff on EU autos and parts at 15 percent, which is lower than the 25-percent duty that Trump imposed on many other trading partners.

These sector-specific duties were not affected by a Supreme Court ruling earlier in the year that struck down a swath of Trump's global levies.

But the US leader said Friday: "Based on the fact the European Union is not complying with our fully agreed to Trade Deal, next week I will be increasing Tariffs charged to the European Union for Cars and Trucks coming into the United States."

"The Tariff will be increased to 25%," he wrote on his Truth Social platform.

He told a Florida event later Friday that Washington had informed Germany of his threat because "they and other European nations have not adhered to our trade deal."

He accused German automakers like Mercedes-Benz and BMW of ripping off Americans.

Trump's announcement came a day after his renewed criticism of German Chancellor Friedrich Merz. Trump told Merz to focus on ending the Ukraine war instead of "interfering" on Iran.

Germany would likely be hit hard by a sharp vehicle tariff, as it is responsible for a significant amount of EU auto exports.

Reacting to the announcement, a European Commission spokesperson told AFP: "Should the US take measures inconsistent with the joint statement, we will keep our options open to protect EU interests."

The spokesperson added that the bloc is implementing its commitments "in line with standard legislative practice" and keeping the Trump administration updated during this process.

Last July, the EU had laid the groundwork for possible retaliation if talks with Washington fell through -- preparing a list of US goods that could be targeted.

- 'Light a fire' -

"President Trump has clearly lost patience with EU efforts to implement its commitments under the bilateral trade deal concluded months ago," former US trade official Wendy Cutler told AFP.

She said Trump appeared to be "hoping to light a fire under Brussels to accelerate its domestic procedures."

His threats to the EU are reminiscent of a similar move against South Korea months ago, added Cutler, who is now senior vice president at the Asia Society Policy Institute.

In late March, EU lawmakers gave their green light to the bloc's tariff deal with Trump, but with conditions.

A large majority of EU lawmakers agreed to cut EU tariffs on some US imports, as a first step towards implementing the 2025 deal, but they also sought additional safeguards.

Although the European Parliament has given its conditional approval to the EU-US trade pact, before the deal is implemented by the bloc, it still needs to be negotiated with EU states.

The new threat on European cars "explain why many small businesses expect to be cautious" with Trump's tariffs, said Dan Anthony, who heads "We Pay the Tariffs," a coalition of nearly 1,200 small businesses.

"You never know what might trigger the next tariff threat," Anthony added in a statement.

In April, EU trade chief Maros Sefcovic was in Washington to meet with counterparts including US Commerce Secretary Howard Lutnick and trade envoy Jamieson Greer.

At the time, he said the EU was also seeking more progress in easing the effects of still-steep US steel tariffs, adding that talks were going in a positive direction.

The United States is the second largest market for new EU vehicle exports, after the United Kingdom, according to a 2025 fact sheet by the European Automobile Manufacturers' Association.

Over a fifth of EU vehicle exports went to the United States.

Germany alone exported some 450,000 vehicles to the United States in 2024, according to the VDA industry group. But that figure has since slipped.

Islami Bank Bangladesh PLC has posted a consolidated profit of Tk136 crore for the year ended December 2025, but the earnings were overshadowed by a staggering Tk84,615 crore provision shortfall against its classified investments, highlighting continued strain in its balance sheet.

Despite the profit, the bank's financial health remains under pressure, according to a price-sensitive disclosure filed with the Dhaka Stock Exchange (DSE).

The lender's result was largely supported by a regulatory deferral facility from Bangladesh Bank, which allowed the provision gap to be spread over 20 years under a recovery plan submitted last October.

However, key indicators point to weakening fundamentals. Net operating cash flow dropped by Tk5,107 crore in 2025, while investment recovery slowed. Deposits from banks and financial institutions also declined by Tk9,662 crore, reflecting liquidity pressure.

The bank's earnings trajectory has also remained weak, falling from Tk635 crore in 2023 to Tk108 crore in 2024 before edging up to Tk136 crore in 2025.

At the end of 2025, consolidated earnings per share stood at Tk0.85, while net asset value per share rose slightly to Tk44.52 from Tk44.36 a year earlier.

A major concern, according to banking sources, remains the bank's exposure to S Alam Group, which along with its affiliates reportedly borrowed over Tk73,000 crore almost half of the bank's total investment portfolio.

Although assets worth around Tk20,000 crore linked to the group have been attached, recovery has been slow due to weak auction response.

The bank has also skipped dividend payments for the second consecutive year and has been downgraded to the 'Z' category on the stock exchange for the first time, reflecting heightened financial stress.

Following the disclosure, the bank's share price fell over 4% to Tk33.30.

The AGM has been scheduled for 25 June, with the record date set for 21 May.

Meanwhile, management reshuffles are underway, with Managing Director Md Omar Faruk Khan sent on extended leave and Md Altaf Hossain appointed as acting MD amid ongoing regulatory oversight and restructuring efforts.

Many of the worst-performing companies have outpaced market leaders in price gains in the secondary market over the past four months, as investors focus on short-term returns amid limited investment options.
FE

Apart from retailers, many institutional investors have not fixed any long-term investment strategy amid the liquidity crisis.

Ahead of the national election held on February 12, investors had been uncertain about the future market direction. After the election, investors' expectations regarding market stability faded as the US and Israel jointly struck Iran and waged war at the end of February.

As a result, the market outlook has become elusive, and investors remain fixated on speculative stocks in the hope of short-term gains.

This is the backdrop in which Dominage Steel Building Systems, despite a significantly negative P/E (price-to-earnings) ratio and one of its factories being shut, has continued its rally on the stock exchanges.

Dominage Steel registered a 131 per cent market price appreciation as of Thursday since January 1, while well-performing multinational company Linde BD experienced a 14.5 per cent decline during the period.

The board of Dominage Steel Building Systems last week disseminated price-sensitive information regarding the sale of their ownership stakes to Akij Resources and two individuals.

Some market operators said insiders, who were aware of the company's intention to sell ownership to the Akij conglomerate, might have played a role in the company's rally.

The rally of Dominage Steel does not reflect any fundamental strength.

Of the other non-performing companies that outperformed market leaders on the bourses, BBS Cables experienced a 30.3 per cent appreciation over the last four months.

The company distributed no dividends and reported a loss of Tk 856 million in FY25, increased from a loss of Tk 133 million in FY24. It has remained in the red in the last three quarters too.

The unjustified rally of BBS Cables, along with other non-performing companies, indicates that investors are hooked on short-term gains from speculative stocks.

Md. Ashequr Rahman, managing director of Midway Securities, said some groups had influenced the rallies of speculative stocks for short-term gains.

The financial performance of some of the companies that have seen a rally is better than that of other poor performers, but that is insignificant compared to blue-chip stocks that experienced correction.

"The absence of any new IPO is another reason why the secondary market has lost its buoyancy," Mr Rahman added.

The country's capital market has seen no new listings since March 2024.

The latest conflict between Iran and the US-Israel alliance disrupted fuel supply through the blockade of the Strait of Hormuz.

Local manufacturers said their profitability would be seriously affected due to the abrupt rise in production costs induced by fuel price hikes.

Apprehension over profit decline has been reflected in stock movements.

For example, the stock price of Unilever Consumer Care closed at Tk 2,163.6 each on April 6, which fell further to Tk 2,065.80 by Thursday.

Meanwhile, the stock price of ACI fell to Tk 193.80 each share on Thursday, which was Tk 211.6 on April 15.

Bangladesh's readymade garment sector in Chattogram is facing mounting pressure as prolonged load shedding and rising fuel costs disrupt production, with factory owners claiming a sharp increase in expenses and growing risks to export orders.

Although the Bangladesh Power Development Board claims that the Chattogram region is currently facing a daily load shedding of around 100MW, in reality, the situation is more difficult, according to garment owners.

At Meher Garments on Sagarika Road in the port city, where around 3,000 workers are employed, a typical workday has become a stop-start struggle, according to the authorities.

On 29 April, production at the factory started at 8am but stopped within 10 minutes due to a power outage. It took another 10 minutes to restart using generators. Power came back at 9:40am, but went out again at 11am. Electricity was restored an hour later.

After the lunch break, power went out again at 4:35pm and did not return until 5:25pm. In an eight-hour shift, the factory remained without electricity for roughly three and a half hours, while repeated switching between grid power and generators caused an additional 30 minutes of disruption.

"During summer, we used to face around two hours of load shedding daily, which required about Tk19,000 worth of diesel to keep the factory running," said Khondaker Belayet Hossain, director of the factory and a leader of the Bangladesh Garment Manufacturers and Exporters Association.

"Now, with three to four hours of outages and a 15% rise in diesel prices, our daily fuel cost has climbed to around Tk40,000," he said.

He added that prolonged generator use causes voltage fluctuations, damaging costly machinery and shortening equipment lifespan. "All of this is pushing up production costs, which were not factored in when orders were placed three months ago."

Industry insiders say the situation is not unique to a single factory. Most RMG factories in Chattogram are experiencing three to four hours of load shedding within an eight-hour workday, compounded by fuel shortages and higher operational costs.

As a result, production expenses have surged by about 20%, timely exports are being disrupted, and manufacturers fear losing orders to competing countries.

According to the industry data, 348 out of 699 RMG factories in Chattogram are currently operational. Unreliable electricity and fuel supply have reduced output, placing additional strain on the export-oriented industry.

BGMEA leaders say frequent power disruptions and gas shortages are disrupting production deadlines. This has delayed shipments, forcing some exporters to rely on air freight – significantly increasing costs.

Failure to meet delivery schedules risks eroding buyer confidence, which could affect future orders, they warned.

Former BGMEA vice-president Rakibul Alam Chowdhury said factories are increasingly dependent on alternative fuel sources due to load shedding, driving up production costs.

"Over the past two months, rising freight charges, higher container handling costs at inland container depots, and increased transport fares have pushed overall production costs up by more than 20%," he said.

"As manufacturers seek higher prices from buyers, many foreign clients are cutting back on new orders or shifting to competitor countries," he said.

SM Abu Tayyab, BGMEA director and president of the Chattogram chapter of the International Business Forum of Bangladesh, warned that the prolonged crisis could severely impact the export earnings.

"If the situation continues, small and medium-sized factories may be forced to shut down, leaving hundreds of thousands of workers unemployed," he said.

He stressed the need for urgent steps to resolve load shedding and gas shortages and to ensure energy security, cautioning that failure to act could put Bangladesh's key export sector at serious risk.

When contacted, Fahmida Begum, the executive engineer of the Power Development Board in Chattogram, said, "After the rain, the electricity demand has decreased leaving no requirement for load shedding. But, still there may be power outages due to a fault in the transmission line during thunderstorms and heavy rain."