Falling commodity prices land major business hubs in trouble

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Jasim Uddin Haroon
Local commodity traders at the country's two major wholesale business hubs-Khatoonganj in Chittagong and Moulvibazar in Dhaka -- are in serious financial troubles.
A number of leading wholesalers have reportedly disappeared with cash money collected from small traders against forward sale of imported and local commodities.
Market sources said a good number of leading traders mainly involved in DO (delivery order) business have been staying away from their offices in the two major business hubs for over one month to avoid wrath from importers, retailers and manufacturers.
Market sources said the businessmen, who fled the market, were incurring heavy losses due mainly to sharp fall in the prices of food and non-food items in the international commodity market.
The traders do their business by taking money in advance from retailers, manufacturers, banks and importers against promise to supply various commodities, market sources said.
Abul Bashar, chairman of Masud and Brothers, country's leading importer, told the FE Friday that a number of businessmen were deliberately keeping away from Khatoonganj as they had incurred huge financial losses due to the fall of commodity prices in the international market.
"We are facing trouble almost every day as the traders come to us for getting back their money which they had paid to the 'middlemen'," Mr Bashar, a leading business leader in Khatoonganj said.
"We are trying to settle these cases, it's a big trouble for us," Bashar added.
Sources at Khatoonganj said the DO businessmen who cannot be traced now have an estimated debt of around Tk 250 million.
Another senior trader said this is a new problem in the country's trading history which might have an impact on the country's commodity markets.
Abdur Razzak, president of Moulvibazar wholesale market in the capital said they are also facing similar situation in the market.
Abdur Razzak, who heads the organization of around 1500 traders in Dhaka, told the FE that around a dozen traders of Moulvibazar who had large debts could not be traced.
"I am really panicky over the situation as it might affect the wholesale market", said Razzak.
"We are also trying to realise money from the traders and bring down the situation under control through discussion," Abdur Razzak said.
Usually in such situations, market sources said, police cases are not filed against anybody because court proceedings not only take a long time, but there is also no written contract or agreement between the parties involved.
Through out-of-court settlement, the possibility of getting some refunds is high, sources said and added that most of the real traders thus always rely on such settlement.