By Moazzem Hossain BBC correspondent in Dhaka

Trade ministers from the world's poorest nations are in Dhaka

Cargo handling at Bangladesh's largest port in Chittagong has been suspended for a third day as foreign vessel operators continue their boycott.

They are protesting against a government rule requiring them to seek permission to carry local cargo.

Exporters said up to $50m of foreign goods, mainly clothing, had been lying at Chittagong port as foreign buyers refused to carry the cargo on Bangladeshi vehicles.

The new government rule requires all foreign vessels to obtain permission from Bangladeshi authorities every time they carry cargo to and from Chittagong port.

Foreign dominance

The authorities say the law dates back to 1982 but was only enforced last week when a Bangladeshi private shipping company won a crucial court case.

The Supreme Court ruled that foreign shippers could only carry goods and containers to and from Bangladesh if local shipping companies were unable to.

We can't send the cargo by Bangladeshi vessel, because the buyers determine in which vessels to carry the cargo Anisul Hoque, clothing exporter

The law had not been used previously because state-owned Bangladesh Shipping Corporation and the country's few private carriers did not have enough ocean-going freight ships.

There are currently only three shipping companies in Bangladesh that operate feeder vessels between Chittagong and Singapore.

The business is dominated by foreign shipping companies carrying 90% of the cargo to and from Chittagong port.

But 20 foreign feeder vessels operating between Chittagong and Singapore began an indefinite boycott from Saturday, protesting against the enforcement of the flag rule.

The boycott has affected almost every export-led business in Bangladesh, but the ready-made clothing industry has been particularly hard hit.

Garments account for nearly 80% of Bangladesh's $6bn annual export earnings.

Standstill

Local traders were also protesting at the ruling, fearing cancellation of their export orders.

Anisul Hoque, a leading Bangladeshi clothing exporter, said exports from Bangladesh to US and European markets had come to a standstill since the boycott began.

"The garment business is seriously affected," said Mr Hoque.

"Usually we export ready-made garments worth $16m every day.

"But today ( Monday ) goods worth $50m are lying at Chittagong port. We can't send the cargo by Bangladeshi vessel, because the buyers determine in which vessels to carry the cargo."

Government intervention

Business leaders and government officials tried frantically on Monday to end the boycott.

But foreign vessel owners said they wouldn't withdraw their action unless the government scrapped the rule which they claim is aimed at restricting their business.

Bangladeshi shipping minister Akbar Hossain said they were considering a change to the flag rule and that a proposal had been sent to the cabinet.