Noman Mosharef :
Despite the government’s efforts to control prices during the holy month of Ramadan by reducing value-added tax and import duties on most essential products like rice, dates, edible oil, and sugar, the impact has been mixed.
Only the price of edible oil has shown a downward trend, while sugar and dates continue to see prices rise.
Starting March 1, edible oil prices were reduced by Tk 10, making a one-litre bottle of soybean oil now cost Tk 163, down from Tk 173, and a five-litre bottle priced at Tk 800. Loose soybean oil is adjusted to Tk 149 per litre.
The government’s decision to reduce duties comes at a time when prices have hit record highs, prompting discussions among the business community and market analysts about the adequacy of these measures.
They argue that the duty cut is insufficient given the skyrocketing prices of daily commodities over the last year, indicating that minor reductions in duty will not significantly impact essential prices.
Traders have also pointed out that the government’s announcement on tax and VAT exemptions came too late, as orders for Ramadan essentials had already been placed.
More than a week after Prime Minister Sheikh Hasina’s directive to reduce duties on key commodities, the National Board of Revenue (NBR) issued a circular on February 8 detailing the duty reductions. However, these adjustments are seen as too minimal by traders and analysts to substantially affect supply and prices.
On the issue, Bangladesh Fresh Fruits Importers Association President Sirajul Islam said, “Last year the duty per kg of dates was Tk 10 on average.
This year the duty has to be paid Tk 170-270 depending on the standard. The main reason for this is the imaginary tariff value.”
“For dates imports costing $500-$600 per tonne, tax is payable on the value of $1,000. At $900 per tonne, the payable duty is on the value of $2,500. So, many importers have reduced date imports.
Those who have already imported dates are releasing goods from the port slowly.”
He added, “The customs duty will reduce the price of dates by Tk 10 – Tk 30 only. It is important to reduce the tariff value, as it remains as before.
There may be a shortage of 10,000 tonnes of dates in the upcoming Ramadan due to importers not getting the duty exemption as expected.
Import duty on dates has been reduced from 25% to 15%, and VAT on soybean oil has been decreased from 15% to 10% at the import level.
Despite these changes, the impact on the market is expected to be limited. The President of the Bangladesh Fresh Fruits Importers Association highlighted the challenges faced by date importers due to high tariff values, suggesting a potential shortage of dates during Ramadan.
Prices of various types of dates have surged by Tk 200 to Tk 300 per kg, and sugar prices remain high at Tk 140-150 per kg, a significant increase from last year’s prices. The duty exemption on sugar is deemed insufficient to lower prices or boost imports significantly.
Among different varieties of dates, Zaidi, Maryam, Nakal, and Dabbas are the most sold in Bangladesh’s market. These were priced at Tk 200 – Tk 600 three months ago. Their price has increased by Tk 200 – Tk 300 per kg, now being sold at Tk 400 – TK 800.
Compared to the last year, the Ajoa date price has increased by nearly Tk 400 per kg, and is being sold for Tk 1,400 per kg.
According to commerce ministry data, the country has an average demand of 1.5-1.75 lakh tonnes of sugar per month, which increases to three lakh tonnes during the month of Ramadan, of which only 30,000 – 35,000 tonnes are produced in the country.
Brig Gen MdZakirHossain, additional managing director of Deshbandhu Group – one of the country’s sugar producers, said, “The decision of duty exemption of sugar amounts to nothing. This decision will make it possible to reduce sugar prices by only Tk 0.50 per kg.
“So, imports will not increase much. As a result, even if the supply is normal at present, the policymakers will be able to tell what will happen due to the additional demand during Ramadan.”
Edible oil prices may decrease slightly due to the duty reduction, but the overall effect on import rates and consumer prices is expected to be minimal. The chickpea market is anticipated to remain stable without supply issues, although prices are currently higher than last year due to the increased USD rate.
Rice importers have noted that the duty cut has had no impact on rice imports, citing high global market prices. Chickpeas are retailing at Tk 100 to Tk 110 per kg, up from last year’s prices.
Currently, sugar is being sold at Tk 140-150 per kg, which was Tk110-120 per kg last year.
Shafiul Athar, the director of TK Group – a leading consumer goods marketing company, said, “Demand for edible oil increases by at least 25 per cent during Ramadan. The price of oil in the market may decrease by Tk 3 – Tk 4 per litres due to the impact of duty reduction.
“But that will be after the arrival of new products.”Besides, hundred per cent of beef and milk is being produced in the country. The price of beef can be fixed at Tk 650 per kg if the government wants to. Beef is currently being sold for Tk 700 – TK 750 per kg.
The supply of other products like meat, milk, and onions is expected to be met from local production, with the new onion season starting before Ramadan. Beef and milk production in the country is sufficient to meet demand, with potential for the government to regulate beef prices if desired.
