As usual, the holy month of Ramadan experiences a fresh hike in prices of household commodities. Bangladesh Trade and Tariff Commission earlier said this year’s import prices would be around 30% higher due to rise in the value of US dollar. However, another public organisation Trading Corporation of Bangladesh (TCB) revealed that price of imported goods is already 59 percent higher than last year with Ramadan only one and a half months away.
Imported goods’ prices were expected to be 30% higher
The Directorate of National Consumer Rights Protection recently held a conference to help stabilise the supply and cost of vital commodities. Mahmodul Hasan, the Assistant Chief of the Bangladesh Trade and Tariff Commission, stated: “This time, the price of imported goods will be around 30 percent higher due to appreciation of US dollar. Even if there is no increase in products’ price in the global market, this condition will prevail in the country. But it won’t rise any further.”
TCB’s price list says the opposite
A review of the TCB’s price list on Thursday last week revealed that imported garlic was being sold at a higher price of 63.64 percent per kg than last year. The cost of 1 kg of imported dry chilies is 63.93 percent higher compared to last year. Besides, imported ginger is being sold at the highest rate of 111.11 percent, cumin 94.44 percent, clove 39.53 percent, powdered milk 40 percent, sugar 50.33 percent, and lentil 47.96 percent per kg. On top, chickpea is being sold at a higher price of 16.67 percent per kg. On an average, the price of these imported necessity goods is 59 percent higher.
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Dishonest traders have raised the prices of products on various pretexts like Covid-19, the Russia-Ukraine war, the dollar crisis, and complications with banks in LC opening. Meanwhile, under such a circumstance, the buyers are having folds of thought in meeting their daily needs. Buyers assert that when Ramadan season arrives, the prices of all goods increase. However, compared to the previous year, the costs of all products have doubled or tripled. However, there is no rise in income.
The government has lowered import restrictions for the rest of the month to sustain the supply of goods throughout Ramadan. In this case, banks have been particularly advised to open LCs. However, businesses are reaping the rewards of this opportunity, and the costs of necessary goods are continuing to rise.
Consumers’ Association of Bangladesh (CAB) President Ghulam Rahman said, “The cost of all goods is higher this year than last year. There are some logical reasons for that too. But there are also unfair reasons. One of them is traders’ tendency of making disproportionate profits. They cause market instability by increasing the cost of items two months prior to the Ramadan period begins. they did the same this time too. They have started generating a significant amount of money by holding the customer captive. Therefore, it will be impossible to maintain the price at regular levels if no action is taken going forward.”
What is happening to demand, supply, and pricing?
Demand for edible oil, sugar, chickpeas, pulses, and dates increases during fasting. In addition, rice and flour are continuously in demand. The majority of the demand for all other goods—aside from rice—is met by imports.
The Bangladesh Trade and Tariff Commission estimates that the nation needs around 1.8 million metric tons of soybean and palm oil annually. Around 350,000 tons of edible oil are needed during Ramadan time each year.
In January, according to the Bangladesh Bank’s statement, there was a rise in the opening of loan documents for the import of edible oil. In January of last year, a credit line for 3,522,000 tons of edible oil was established. In this January, that figure has risen by 38,000 tons.
According to TCB, the price of bottled soybean oil was Tk 158 to Tk 170 per liter during Ramadan last year, which is now Tk 180 to Tk 185. Soybean oil prices have not increased in the last week. However, the price of palm super oil has increased by Tk 5 per liter and is being sold at a minimum price of Tk 135.
The annual demand for sugar in the country is about 24 lakh tons. During Ramadan, 3 lakh tons of sugar are required. 682,000 tons of sugar were imported in the last three months, which is 15,000 tons less than in the previous year. Additionally, the cost of sugar is rising on the market. The government has set the price of sugar per kilogram at Tk 107, but it is being sold between Tk 110 and Tk 120 in the market. Last Ramadan, the per kg cost of sugar was less than Tk 80.
There has been a decline in chickpea imports. The imports during the past three months totaled 43,000 tonnes, which is less than half of the same time last year. However, lentil imports have surged. Wheat imports are not very substantial because of the high price of flour on the market. In the last three months, imports of wheat fell by 25% to 1.6 lakh tonnes. A kg of packaged flour is now being sold at Tk 65-68 and flour at Tk 75-78 in the market. It was Tk 42–45 and Tk 55–58 respectively in the last year.
World market price is coming down, why no such reflections in Bangladesh?
Prices of commodities had substantially risen on the global market following the Russia-Ukraine war. However, the market has marked some decrease recently. There are price reductions for sugar, soy oil, palm oil, lentils, and chickpeas. According to the World Bank, the price of soybean oil was about $1,900 per ton from April-June last year. It is now only $1,400.
The price reduction in the world market is not benefitting the country much as import costs have risen across the country. There are two causes for increase in import prices: the appreciation of the dollar and the increase in tariffs caused by US dollar’s appreciation. Notably, the exchange rate for the dollar in May 2022 was Tk 86, which is now Tk 106.
The Center for Policy Dialogue’s (CPD) Research Director Dr. Khondaker Golam Moazzem, said there is currently no possibility to import huge quantity of Ramadan items. “However, attention should be given to ensure that the products, which are being imported before fasting continue to be marketed. The market should be monitored so that no one can stockpile products in the hope of getting exorbitant prices. Then the trend of rising prices can be prevented”, he viewed.