Agri Biz
Fresh fruit imports fall 50pc in four months on tightened rules
Imports of fresh fruits dropped 50pc in the four months till August with the government tightening rules regarding the procurement of such non-essential items to ease pressure on depleting forex reserves.
The National Board of Revenue raised the regulatory duty on imports of various fresh fruits to 20pc from the earlier 3pc, while the Bangladesh Bank slapped a 100pc cash margin requirement for opening letters of credit for imports of such products.
As of April this year, fruit imports through Chattogram port were around 70,000 tonnes on average. In the wake of such restrictions, imports came down to 35,000 tonnes in the span of a month. The falling trend continued in the next two months and slumped to 21,571 tonnes in July, according to Chattogram customs.
In August, fruit imports marked a 55pc month-on-month rise to 33,454 tonnes, but the quantity still remained way lower than that in April.
Businesses say the overall import duty on fresh fruits has now increased to 113pc from a little over 89pc because of the 20pc regulatory duty imposed by the government in May this year.
Besides, they now have to make a full deposit before opening LCs for fresh fruit imports. Earlier, the margin ranged between 10pc and 20pc, they note.
That is why small and medium entrepreneurs have now stopped fruit imports as they are unable to maintain such a high cash margin.
Bangladesh imports various fresh fruits, such as apples, oranges, mandarin, grapes and pears mainly from China, Australia, South Africa, Brazil, Argentina, New Zealand, Afghanistan and France.
Importer Zinnat Ali, an owner of JM Trading, told, “I would import fruits worth Tk2 crore per month by making a 20pc deposit against LC opening. But the 100pc cash margin has made it impossible for small importers like me to continue with the imports.”
A drastic fall in fruit imports has affected retail sales. Billal Hossain, a retail fruit trader in Chattogram city’s Baluchara market, said prices of imported fruits have increased between Tk100 and Tk150 per kg in the last few months. At the consumer level, fruit sales have fallen by more than half.
In the span of five months, apple prices have shot up to Tk250 per kg from Tk180, malta to Tk220 per kg from Tk160 per kg, orange to Tk250 per kg from Tk200, grapes to Tk500 per kg from Tk300, he noted.
Jonaidul Haque, a fruit importer, said, “We used to import fruits worth Tk30 crore on average every month. We are now facing financial losses as our imports have dropped drastically in recent months.”
Touhidul Alam, general secretary of Falmondi fruit market traders’ association in Chattogram, said in normal times, Tk27 crore worth of fruits were sold in Chattogram per day, but sales have now halved.
Bangladesh Prime Minister Sheikh Hasina has asked all concerned to find a way out to ensure sustainable export growth and explore new global markets for Bangladeshi goods in the wake of the Russia-Ukraine war.
The Prime Minister made the call while speaking at the 11th meeting of the National Committee on Export, at her official residence Ganabhaban in Dhaka on Monday (20 March).
PM said, “Steps will have to be taken to achieve sustainable export growth after analysing situation steamed from the global economic recession due to the war in Ukraine,” she told the 11th meeting regarding export at her official Ganabhaban residence here.
The prime minister also urged all concerned to diversify the export items and explore new markets for those alongside revitalising the local markets.
“A new scope has been created globally to explore new markets for Bangladeshi items due to enhanced demands for goods because of the war in Ukraine. We have to grasp the markets,” she added.
The premier also called for formulating a new export policy for another 4 or 5 years by revising, changing and improving the existing one going to expire by 2024.
She said the new export policy should be adopted by analyzing the ongoing global economic recession, sanctions, counter-sanctions for the war and the challenges and scopes possibly to be created in Bangladesh after the graduation from the LDC by 2026.
Presently, the consumers will have to spend more money than usual in case of purchasing dates and other fruits—two essential items in iftar during Ramadan, due to importers’ difficulty in opening letters of credit (LCs) on time.
Price hike is a most common phenomenon ahead of the month of Ramadan in Bangladesh, and this year even more due to the LC opening crisis.
Already, the price of dates has doubled in the wholesale and retail markets and it will be more expensive ahead of Ramadan, said some businessmen.
The price of all types of dates has hiked in the local markets ranging from Tk 40 to Tk 160 per kg while different fruits range from Tk 30 to Tk 100 per kg.
Some traders said the prices of these essential iftar items will increase further during the month of Ramadan as they are facing difficulties in opening LCs which will push up the prices of dates and fruits.
According to the sources at Trading Corporation of Bangladesh (TCB), the price of dates increased by 20 percent compared to the last year.
Milton, a shop owner in the Baridhara area, said “The price of dates went more expensive in the past month ahead of Ramadan and I was able to purchase a limited amount of dates due to the soaring price of it.
He also feared that the price of dates would be soared further in the month of Ramadan.
Habibur Rahman, a fruit trader said the price of every fruit has increased.
Whatsoever, ajwa variety of dates is being sold at Tk 750-800 which was available at Tk 600-700 last year. Mariam variety of dates is being sold at Tk 800-850 while the premium variety of dates is being sold at Tk 1000-1200 per kg.
According to the statistics of Bangladesh Bank, the import of dates has fallen by almost half compared to the demands of it but during Ramadan the demand for dates is about 50,000 tonnes.
In the past three months, only 22,000 tonnes of dates were imported which is 46 percent less than the last year. However, the authorities concerned related to import dates have opened LC of 29,000 tonnes dates in January, said sources at Bangladesh Bank.
Sirajul Islam, president of Bangladesh Fresh Fruits Importers Association, said the demand for dates increases three to four times during the month of Ramadan. Besides, there is a demand of 50,000-70,000 dates in the country in a year while 40,000-50,000 is needed in Ramadan alone, he said.
Referring to the opening of LC, Sirajul said “This year the traders faced difficulties in opening LCs in time as they had to open it by paying 100% cash margin while it was 5 percent. The small traders are the worst sufferers in opening LCs.”
The dates are being imported from the Middle East and Africa and dates were being stocked five-six months before the Ramadan, he added.
He also said that the price of dates may increase 30 percent in Ramadan due to the dollar crisis and transport cost caused by the fuel price hike.
If the government will take steps in unloading dates in ports on a priority basis, then there will be no instability in the market, said Sirajul.
Contacted, Commerce Minister Tipu Munshi, said “We’ll take necessary steps so that the consumers can purchase dates, the most essential items in iftar, at a tolerable price.”
He also assured of keeping monitoring the market to prevent volatile price hikes of dates.
Issuing a warning, the minister also said strict action will be taken against those involved in increasing the price of dates after creating an artificial crisis.
The state-run Trading Corporation of Bangladesh (TCB) has taken an initiative to sell 6 essential items to some 1 crore low-income groups of families ahead of the holy month of Ramadan.
TCB will start selling 3 essential items – edible oil, sugar, dates and chickpeas and lentils—among such families from Thursday (March 9). These essential items will be sold in two phases. In the first phase selling of the items will start from Thursday across the nation.
Commerce Minister Tipu Munshi will inaugurate the sales of essential items formally through a function at Tejgaon in the capital on Thursday.
The cardholders can buy the six goods at subsidized rates from the TCB’s specific sales points and dealers’ outlets. Any cardholder can buy 2 litres of soybean oil, 2 kg lentil, sugar, chickpea and 1 kg date at a time. All the specific card holders can buy sugar at Tk 60/per kg, date at Tk 100, lentils at Tk 70, chickpeas at Tk 50 and soybean oil at Tk 110 per liter.
