Oil, sugar prices cool on PM's duty cut announcement ahead of Ramadan
Consumer goods market is gradually cooling down after Prime Minister Sheikh Hasina’s announcement to reduce tariffs on imports ahead of Ramadan prompted mill owners to release stocks.
31/01/2024 (Somoy News) - Mill owners have started releasing goods fearing huge losses when the new tariffs come into effect. The prices of edible oil, sugar and chickpeas have dropped by Tk 50 to Tk 100 per maund (37.32kg) in just one day.
Last year, the booking rate of edible oil was reduced several times in the global market, but it has not been cut in the domestic market. But Prime Minister Sheikh Hasina's announcement to reduce tariffs has significantly affected the market.
The prices have to be slashed by Tk 180 per maund if there’s a 5% duty cut, while a 10% cut will force them to cut prices by at least Tk 400. This has prompted mill owners to release their stocks to avert losses.
Bangladesh’s annual demand for edible oil is about 2 million tonnes. Almost 1.8 million tonnes are imported, according to the Tariff Commission.
Currently, the edible oil booking rate (per metric tonne) is $915 for soybeans and $905 for palm oil.
Similarly, even though there is no duty on chickpeas, importers have been increasing the price as per their whim. However, rising imports have pushed down prices in recent times, with Australian chickpeas going down from Tk 94 to Tk 89. The normal variety now costs Tk 80.
Md Mohiuddin, owner of FM Traders at Chattogram’s Khatunganj, said the demand for Ramadan has not yet started but there is no crisis in the market.
The situation is similar to that of oil in the wholesale sugar market. Sugar mill owners are also releasing their stocks. Currently, sugar costs Tk 132 at the wholesale level.
Mahmudul Haque Liton, owner of AM Enterprise in Khatunganj, said the quantity of goods that are coming will be available in sufficient quantity at low prices. If the duty is reduced, there is a possibility of a further reduction of Tk 100-150 per maund.
However, the prices of dates are still high as importers are not getting their goods released from the port. Prices are expected to fall when imported dates hit the market.
Meanwhile, after the prime minister's announcement, the National Board of Revenue has started reducing duty rates on consumer goods. Chattogram Customs House Deputy Commissioner Md Badruzzaman Munshi said they are waiting for NBR’s instructions.
Bangladesh imports about Tk 4 lakh crore of consumer goods annually.