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Ramadan supplies ample, yet no hope for price fall
calendar05-02-2024 | linkThe Business Standard | Share This Post:

04/02/2024 - (The Business Standard) - Global commodity prices have fallen and traders have also built good stocks of sugar, dates, edible oil, pulses, chickpeas and onions for Ramadan market, but there is no good news for local consumers. Prices are unlikely to decrease as traders argue the dollar crisis and the Red Sea conflict have made their imports costlier.

 

This situation stands in contrast with the global market, where food prices have come down to a three-year low.

 

The United Nations Food and Agriculture Organisation's (FAO) world price index fell in January to its lowest level in nearly three years, driven by declines in cereals and meat. The January reading was the lowest since February 2021.

 

But no relief for consumers in Bangladesh is in sight. Rather, traders have warned that increasing freight charges caused by the Red Sea crisis may prompt further rise in prices.

 

Wholesalers at Chattogram's Khatunganj market say Ramadan consumer goods are typically imported three to four months before the fasting month begins. However, if the import volume falls short of demand due to any crisis, prices can surge overnight.

 

"This season, both small and large-scale importers have collectively imported a sufficient amount of consumer goods. There is no possibility of any shortage of these products during Ramadan. However, the import cost is higher than before," said Nurul Alam, proprietor of Messrs A Zaman Traders at Khatunganj.

 

He added, "We will sell the products as per the rates set by the Tariff Commission."

 

The businessman further said bookings and sales of these products in the market are relatively lower this year when less than a month and a half remain for Ramadan.

 

Importers say that sugar, edible oil, chickpeas, and onions have been imported in adequate quantities, ensuring an ample supply during Ramadan.

 

According to the Chattogram Customs House, from 1 October last year to 20 January this year, approximately 1.19 lakh tonnes of sugar were imported through the Chattogram port, compared to around 80,000 tonnes in the same period a year earlier.

 

Similarly, crude edible oil imports reached 7.47 lakh tonnes in the last three and a half months, surpassing the 6.59 lakh tonnes from the previous season.

 

Additionally, this season witnessed an import of over 49,000 tonnes of chickpeas during the same period, compared to over 24,000 tonnes in the previous season. About one-third of the annual chickpeas demand is consumed during Ramadan.

 

In the past three and a half months, around 1.96 lakh tonnes of onions were imported, surpassing the 1.54 lakh tonnes during the same period last season.

 

Conversely, the import of dates during this period amounted to over 10,000 tonnes, a notable decrease from the 25,000 tonnes imported in the corresponding period last season, marking a 59.29% reduction. Around half of the annual demand of dates typically consumed during Ramadan.

 

Additionally, the import of pulses during this timeframe stood at around 1.73 lakh tonnes, marking a 9.53% decrease compared to the 1.9 lakh tonnes imported last year.

 

Barrister Md Badruzzaman Munshi, deputy commissioner of Chattogram Customs, told TBS, "Consumer goods in high demand during Ramadan have seen a substantial increase in imports compared to last year. Several products have already been released from the port, with additional goods awaiting clearance. Moreover, more imported goods are en route to the port. This time, there is no possibility of any crisis."

 

As per traders in Khatunganj, wholesale prices currently stand at Tk134 per kg for sugar, Tk91 per kg for good quality chickpeas, Tk83-Tk88 per kg for medium quality chickpeas, and Tk78 per kg for low-quality chickpeas. Additionally, wholesale edible oil is priced at Tk176 per litre, and palm oil at Tk130 per litre.

 

Moreover, mung dal is available at Tk160 per kg, peas at Tk70 per kg, thick lentils (Australian) at Tk102 per kg, and thin lentils (local and Indian) at Tk134-Tk138 per kg.

 

Conversely, Pabna's murikata onion, a local variety, is being sold at Tk80-Tk85 per kg, while onions from Meherpur are priced at Tk70-Tk85 per kg in the wholesale market.

 

Biswajit Saha, director of City Group, one of the country's leading consumer goods importers, said the price of edible oil is slightly lower than last year, but sugar and pulses prices are increasing. The primary concern is the rise in import costs over the past year due to the devaluation of the taka against the dollar.

 

"We are now required to invest extra money in imports, with LCs requiring a 120%-125% cash margin. The Red Sea crisis poses a risk of further impacting goods prices due to the increased freight charges," he added.

 

Impacts of the Red Sea crisis

 

According to the Bangladesh Freight Forwarders Association, around 8% of the country's total imports are transported through this route.

 

Mizanur Rahman, senior official of Meghna Group, said freight charges on the Suez Canal and Red Sea routes have risen by more than 50%. Consequently, there has been a 15% increase in ship fares on other routes as well. Importing consumer goods now requires paying 10%-15% higher fares for bulk cargo ships.

 

"We are facing losses, and the prices of consumer goods are expected to rise," he said.

 

However, Bangladesh Freight Forwarders Association officials say although there has been an increase in the freight charges of ships due to the Red Sea crisis, the supply chain disruption has not impacted the imports of Ramadan essentials.

 

"Most of Bangladesh's consumer goods is imported from countries in the Asian region, including China," said Khairul Islam Suzan, vice president of the association.

 

SM Nazer Hossain, vice president of the Consumer Association of Bangladesh (CAB), pointed out that various government entities are tasked with controlling product prices, but their efforts to address the root of the crisis seem ineffective.

 

He highlighted that while prices of many products were initially increased citing the Covid-19 pandemic and the Russia-Ukraine war, very few products have seen a subsequent reduction in prices. Subsequently, the issue of the dollar crisis was used to justify price increases. Now, traders are using the Red Sea crisis as a pretext to further hike prices.

 

He questioned why, despite reductions in the international market, the prices of many products have not decreased in our country.

 

https://www.tbsnews.net/economy/bazaar/ramadan-supplies-ample-yet-no-hope-price-fall-786914