Bangladesh will face higher import and export costs if the US and Israel’s war against Iran prolongs, as shipping and airfreight charges have already started to rise, and cargo is being diverted along longer shipping and air routes.

Industry insiders say importing raw materials such as cotton and other factory inputs from the US and Europe might become more expensive, possibly driving up production costs at local mills and factories.

Since the war began on Saturday, at least six international airlines, including Qatar, Kuwait, Oman, and Air Arabia, have suspended cargo operations from Hazrat Shahjalal International Airport (HSIA), according to Kabir Ahmed, former president of the Bangladesh Freight Forwarders Association.

He said airlines that are still flying from Dhaka are carrying limited cargo, leaving more than 1,200 tonnes, particularly garments, stranded at the airport.

According to Ahmed, exporters may have to reroute shipments via China, Malaysia, and Hong Kong to reach Europe and the US, which is likely to increase costs.

Bangladesh usually uses Colombo, Singapore, and Port Klang in Malaysia as feeder ports. Smaller vessels carry cargoes from Chattogram to those seaports and feed large mother vessels. Most cargo then travels to Europe and the US via the Suez Canal or around the Cape of Good Hope.

Two years ago, shipping companies reduced Suez Canal use after Houthi attacks following Israel’s Gaza offensive. Vessels taking the Cape of Good Hope must travel nearly 5,000 kilometres further and burn more fuel, prompting higher freight charges.

“This time too, shipping companies have begun raising rates. International buyers may pass these costs onto local suppliers through discounts or cost-sharing requests,” said Ahmed.

He added that exports and imports are unlikely to face a full stoppage, though transportation costs will rise.

A more serious concern is energy supply.

Iran’s Revolutionary Guards have declared the Strait of Hormuz closed and vowed to fire on any ship attempting to pass, threatening a critical maritime artery through which about one‑fifth of the world’s oil flows.

Reports say around 150 vessels were stranded near the strait yesterday, and at least four tankers had been damaged, as insurers cancel war risk cover for Gulf transits.

About 90 percent of Bangladesh’s imported oil passes through this strait.

The closure has already contributed to a double-digit rise in global oil prices, and government agencies are evaluating alternative energy sources amid concern about fuel supply and inflationary pressures.

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said Bangladesh’s trade flow may manage to keep moving thanks to alternative channels and continued Suez Canal access.

“But freight costs will rise as shipping lines increase vessel fares. Rising liquefied natural gas prices will also push up production costs,” he added.

Meanwhile, Masrur Reaz, chairman of Policy Exchange, said insurance premiums have already increased, and rerouted freight is likely to push up the cost of international trade.

Abdullah Al Mamun, spokesperson for the Bangladesh Textile Mills Association (BTMA), said supply chain disruptions during conflict inevitably raise business costs, though alternative sourcing from Asian markets such as China and India can reduce risks.

Taslim Shahriar, deputy general manager of Meghna Group of Industries, said freight rates and global edible oil prices have already been affected.

“Freight for palm oil imports from Malaysia and Indonesia has risen by $8 to $10 per tonne. Soybean oil prices have increased by $30 to $40 per tonne, while palm oil is up $10 to $20 per tonne since the escalation,” he said.

Biswajit Saha, director of corporate and regulatory affairs at City Group, added that prolonged closure of the Hormuz Strait could cause problems, but short-term disruptions of a week or ten days are unlikely to create major difficulties.

Mohammed Monsur, general secretary of the Bangladesh Fruits, Vegetables and Allied Products Exporters Association, said regional instability is a concern ahead of the summer season, when Bangladesh’s vegetable exports to the Middle East can quadruple.

Anup Kumar Saha, executive director of Akij Insaf Group, said the country currently holds sufficient wheat stock to meet domestic demand for at least two months, providing some short-term relief.

While it’s tempting to assume the dollar’s long-lost “safety” bid has returned since the weekend Iran attacks, it’s not as clear-cut as it seems and owes more to relative energy plays. Yet the implications of the market response may be just as powerful.

Ever since Donald Trump’s return to the White House last year, the dollar has waned even during periods of market anxiety and volatility, due in ​large part to US economic policy uncertainty and both domestic and geopolitical upheaval.

Reversing years of dollar over-valuation is a key tenet of the Trump administration’s economic plan. But the greenback’s diminished haven role in times of ‌global political or financial stress suggests foreign investors - already up to their eyeballs in US assets - have changed their behaviour.

So it was remarkable that the dollar jumped across the board after last weekend’s extraordinary bombing campaign by US and Israeli forces against Iranian targets, including the assassination of Supreme Leader Ali Khamenei and the wave of regional violence that’s followed.

The crux of the move hinged more on the inevitable energy price dynamics rather than any dash for dollars per se. In fact, it was more a default move out of the currencies of economies ​worst hit by an outsized and protracted energy price squeeze.

DOLLARS BY DEFAULT

With the US now a net exporter of total petroleum and energy products in general, the initial 10 percent surge in world oil prices on Monday hurt other ​major currencies much more due to fears of a major demand hit if the supply hiatus persists for several weeks or even months.

That’s why other traditional havens such as Japan’s yen , caught no safety bid this time around and plunged over 1 percent against the dollar on Monday given Japan’s big energy import bill and the fact that about a third of its energy imports comes through the Strait ​of Hormuz.

China too is a big consumer of oil now stuck in those contentious waterways, particularly deeply discounted Iranian crude that’s sanctioned in the West and now also in limbo. The recently high-flying yuan turned tail on Monday and dropped 0.8 percent as the ​situation unfolded.

“This isn’t a friendly outcome for the Northern Asian currencies,” said Societe Generale currency strategist Kit Juckes, adding that the most important indication from Trump so far has been that the US action will take weeks, not days.

For Europe, the calculation is compounded by its exposure to natural gas after the shipping attacks effectively closed the Hormuz route, a conduit for 20 percent of worldwide liquefied natural gas shipments and up to 30 percent of crude oil.

Benchmark European gas prices surged by almost 50 percent at one point on Monday to their highest in more than ​a year, closing up 35 percent and prompting the European Union’s gas supply group to schedule an emergency meeting for Wednesday.

A line chart of the price of the European gas benchmark contract in euros per megawatt hours (MWh) since October 1, showing increasing volatility since January.

A line chart of the price of the European gas benchmark contract in euros per megawatt hours (MWh) since October 1, showing increasing volatility since January.

The US supplied 58 percent of the European Union’s LNG last year. Qatar, which accounted for 6 percent of the bloc’s imports, shut down its ​production plants on Monday after attacks from Iran.

The euro fell 1 percent against the dollar to its lowest in more than a month.

The Swiss franc’s long-standing and often unwelcome haven status remains in play - but it’s complicated by the Swiss National Bank’s battle against deflation ‌and its restated commitment to intervene to sell francs to cap the unit.

READY RECKONERS?

As to the overall economic hit from an oil spike worldwide, Barclays economists assume every sustained $10 per barrel rise in crude prices takes up to 0.2 percentage point off global growth. And if a wave of forecasts of $100-plus per barrel were to prove accurate, then that could well bite.

As it stands, however, Monday’s net Brent crude price rise of $5 to $77 per barrel will be a much more modest blow - and the moves so far would barely have any significant demand impacts on the US itself.

Calculations then turn to whether oil price pressure becomes an economic depressant or inflation aggravator. With US core inflation running above 3 percent, ​that could argue for more focus on the latter and ​for keeping US interest rates high through the year - another support for the dollar.

But, as so often with Middle East conflicts, the initial ready-reckoners on global economic hits all hinge on duration of conflict and the energy supply disruption.

Trump has indicated the military campaign will run for four or five weeks and, likely riffing off that, prediction markets such as Polymarket see a 63 percent chance Trump will ​call a halt by the end of this month.

And yet most of the thinking on currency reactions is not strictly calculations of dollar hoarding or cross-border dash ​for safety - rather they seem ⁠just like relative economic assessments emanating from energy exposure.

But for all that, it can have a powerful and looping effect.

Barclays’ rule of thumb for the dollar, for example, is that it gains between 0.5 percent and 1.0 percent for every $10 increase in oil.

If dollar‑denominated energy prices rise and stay high, pushing the exchange rate up with them, that would both worsen the energy shock for overseas economies and drive the dollar even higher in a self‑reinforcing loop.

No one would want that scenario - least of ⁠all Washington.

British American Tobacco Bangladesh has recommended a 30% cash dividend for 2025, sharply lower than the 300% cash dividend it distributed in 2024.

Following the disclosure, the company's share price fell by 8.94% to Tk242.30 today (3 March) at the Dhaka Stock Exchange.

The company also reported a loss of Tk136 crore in the October–December quarter of 2025, reflecting a sharp deterioration in earnings amid declining cigarette sales and higher operating costs.

In a statement, the company reported a 67% decline in earnings per share (EPS) for the year ended 31 December 2025, as profit came under significant pressure. The significant drop was mainly due to lower turnover and increased operating expenses. Costs rose as a result of inflationary pressures and higher levels of activity in certain parts of the business.

Net operating cash flow fell by 81% compared to the previous year. The decline was largely driven by lower profit and higher cash outflows following an increase in excise duty, although some of the impact was offset by other factors.

In July 2025, the company ceased operations at its Dhaka factory and relocated the plant, machinery, and cigarette manufacturing equipment to its Savar facility. The compulsory site closure, coupled with relocation and restructuring costs, resulted in a one-off negative impact of Tk715 crore on operating profit compared to the previous year.

According to the company's financial statements approved at a board meeting held yesterday (2 March), the multinational tobacco manufacturer posted a loss per share of Tk2.53 in the fourth quarter of 2025.

For the full year ended December 2025, earnings per share stood at Tk10.81, representing a 67% decline year-on-year.

The company has scheduled its annual general meeting for 30 April to seek shareholder approval for the audited financial statements and the proposed dividend. The record date has been fixed for 1 April.

In its price-sensitive disclosure, the company did not offer detailed explanations for the sharp drop in profit and dividend payout in 2025. However, earlier disclosures indicated that business performance came under strain following the closure of its Mohakhali factory on 1 July 2025.