Economy
Spice Market in Turmoil as Supply Shortage Ignites Price Surge
The spice market has been hit hard by a supply shortage, stemming from import disruptions caused by dollar crises and regulatory duties.
Over the past three months, this scarcity has led to a significant surge in spice prices. Market insiders reveal that the situation has been further exacerbated by a syndicate of unethical traders seeking to exploit the heightened demand ahead of Eid-ul-Azha. Importers and traders of spices point out that, apart from cumin, the prices of several spices have actually dropped in the international market.
Retailers and wholesalers confirm that spice prices have skyrocketed by 50% to 100% in recent months. Particularly affected is cumin, a staple ingredient in the garam masala blend favored by the middle class, which has nearly doubled in price. Currently, cumin is being sold at wholesale levels for Tk 770-Tk 850 per kg, while at retail levels, it commands a price of around Tk 1,000 per kg. Comparatively, three months ago, cumin was sold at Tk 350-Tk 400 per kg, making the current price approximately Tk 450 higher. These observations come from traders at Chattogram’s Khatunganj market, one of the largest wholesale markets in the country.
Likewise, cardamom prices have surged by Tk 400 to reach Tk 1,500 per kg, cloves have increased by T k800 to reach Tk 1,500 per kg, nutmeg has risen by Tk 1,000 to stand at Tk 3,000 per kg, fennel seed (mouri) has gone up by Tk 200 to reach Tk 310 per kg, black pepper has climbed by Tk 150 to hit Tk 670 per kg, and jayotree (mace) has seen a Tk 150 increase, reaching Tk 750 per kg. Furthermore, cinnamon has risen by Tk 70 to reach Tk 320, coriander by Tk 60 to Tk 180, mustard by Tk 50 to Tk 105, and tejpata (bay leaf) by Tk 20 to Tk 90.
Imported ginger and garlic from China have also experienced price volatility due to supply shortages. Currently, ginger imported from Myanmar and Vietnam is being sold for Tk 260-Tk 280 per kg, whereas it was previously priced at Tk 140. Chinese garlic has also seen a significant price hike, reaching Tk 250 per kg compared to its previous rate of Tk 120 per kg.
Red chili, which usually fluctuates between Tk 150 to Tk 250, is currently being sold at Tk 450-Tk 500. Dried turmeric is currently priced at Tk 125-130 per kg. Indian onion is available for Tk 25-Tk 45 per kg, while local onions are priced at Tk 50-Tk 52 per kg, which dropped from Tk 100 following the recent government decision to allow onion imports.
During the eleventh month of the current fiscal year, the country’s foreign currency reserves have fallen below $19 billion for the first time. After paying off some import bills, the reserves have now stood at $18.26 billion on Sunday.
According to the International Monetary Fund (IMF), as of May 8, the total foreign currency reserves of the country were $19.82 billion.
Mohammad Mezbauul Haque, the spokesperson of Bangladesh Bank, informed that through the Asian Clearing Union (ACU), the central bank has paid off import bills totaling $1.63 billion over the past two months.
However, Bangladesh Bank maintains that after paying off the import bills, the foreign currency reserves now stand at $23.71 billion.
According to the Central Bank’s accounts, the reserves were $25.27 billion on May 8.
The Dhaka Stock Exchange (DSE) and the DSE Brokers Association (DBA) have expressed gratitude towards Prime Minister Sheikh Hasina for her directive to list government companies in the capital market, a move hailed as timely and positive.
The directive was issued during the recent meeting of the Executive Committee of the National Economic Council (Ecnec) last Thursday.
Dr. Hafiz Muhammad Hasan Babu, Chairman of DSE, described the directive as a significant step towards enhancing the dynamics of the capital market. He emphasized that besides invigorating the capital market, this move would also attract foreign investment and promote sustainable development.
Despite previous efforts, government institutions had not been listed in the stock exchange, according to a notification issued by the DSE. The Prime Minister’s directive is seen as a pivotal step towards revitalizing and expanding the economy.
Dr. Babu further remarked, “The listing of reputable companies in the capital market, as directed by the Prime Minister, will greatly benefit the country’s economy. It will also enhance investor confidence.”
Similarly, the DBA released a notification applauding the Prime Minister’s directive, terming it as positive and timely for the capital market.
Saiful Islam, President of DBA, expressed optimism about the directive’s potential to accelerate the country’s capital market and overall economy. He pledged support to relevant government departments and regulatory bodies in implementing the directive, ensuring its positive impact on the economy, including the capital market.
India has expressed interest in financing Bangladesh’s Teesta project, announced Foreign Minister Hasan Mahmud. Speaking to reporters after a meeting with Indian Foreign Secretary Vinay Mohan Kwatra, Mahmud stressed the importance of aligning the project with Bangladesh’s needs. He confirmed discussions on the Teesta issue during the meeting. Mahmud also affirmed Prime Minister Sheikh Hasina’s upcoming visit to New Delhi, indicating that the finalization of the date would depend on the formation of the new Indian government following ongoing elections.
Meanwhile, the IMF has approved a $1.15 billion staff-level loan for Bangladesh in its third tranche. Mahmud noted the ongoing elections in India and the subsequent formation of the new government as factors influencing the scheduling of PM Hasina’s visit.
When asked about the sequence of visits to India and China, Mahmud suggested Delhi’s geographical proximity to Bangladesh. Diplomatic sources suggest PM Hasina’s visit to India is planned for early July, following India’s elections.
Pre-election surveys indicate strong prospects for Indian Prime Minister Narendra Modi’s re-election. Modi previously congratulated PM Hasina on her electoral victory in January, expressing optimism about strengthening ties between the two nations.
The last bilateral engagement between the prime ministers occurred during the G-20 Leaders Summit in September 2023. Modi is expected to invite South Asian and BIMSTEC leaders to his swearing-in ceremony, fostering regional cooperation.
Addressing border killings, Mahmud emphasized the government’s commitment to ending such incidents and promoting the use of non-lethal weapons by border forces. Discussions also covered enhancing physical and people-to-people connectivity, including cooperation with India to import hydropower from Nepal and Bhutan through India. Mahmud highlighted the need to further ease visa restrictions to strengthen people-to-people relations.
