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Market lukewarm to duty reduction

Prices of some necessaries spike further

YASIR WARDAD | February 12, 2024 00:00:00

Tax cuts are yet leave any impact on the market, as prices of some necessaries recorded fresh spikes despite the government having reduced import duties on such essential products.

Sugar, coarse and medium rice, loose soybean and palm oils, onions, eggs, chickens, beef, pulses, vegetables -especially brinjal-were toeing previous one-month uptrend.

On Sunday, coarse and medium rice retailed at Tk 55-68, eggs Tk 145-150 a dozen, sugar Tk 150-165 a kg, palm oil Tk 145-150 a litre, loose soybean oil Tk 165-170 a litre, onion Tk 120-130 a kg and lentils Tk 125-165 a kg, depending on quality.

Only prices of dates (common to medium) remained static at a previous high of Tk 320-500 a kg while potato was the only product to show a decline slightly--veritably subdued by import decision.

The National Broad of Revenue (NBR) recently reduced import duties on rice, sugar, edible oils and dates as per an urgency of the Prime Minister in view of the upcoming holy Ramadan.

The NBR knocked down the preventive duties and taxes on rice import to 15.25 per cent from 62.5 per cent while import duties on raw sugar were cut by Tk 500 per tonne.

The VAT of 15 per cent on edible oils has been withdrawn while its import duty has been reduced to 10 per cent from 15 per cent.

The import duty on dates has been reduced from 25 percent to 15 percent.

Market surveys show the duty rationalisation hardly could put impact yet as prices even further increased in the retail markets in last one week.

Sanat Kumar Ghosh, Chattogram's Khatunganj-based trader, said loose palm-oil and soybean-oil prices further increased by Tk 1.5-2.0 a litre.

He feels oil prices might decline by Tk 4.0-5.0 a litre with the beginning of new import which would take a month.

"Before then, prices might show a gradual hike amid rising demand among the wholesalers ahead of the holy month of fasting," he says.

He thinks sugar price might decline maximum by Tk 1.0 a kg as per the NBR duty rationalisation which will put no impact on the market.

Ghosh forecasts date prices might show a Tk 35-40-a-kg plunge after fifteen days with newer arrivals.

Md Shamsul Hoque, a Rangpur-based importer, told the FE that rice import is not viable following the rocketing prices on the global market.

"Even if there is zero duty, the minimum price will be over Tk 60 a kg when there is still a 15.25-percent duty here," he said.

He said import cost of the cheapest rice is now over US $ 550 a tonne.

Consumers Association of Bangladesh (CAB) vice-president SM Nazer Hossain told the FE writer that duties on essential items which are mostly import-dependent should totally be waived for now to tame the wayward market.

He said the sugar price surpassed Tk 150 a kg and the NBR reduced its duty only by Tk 1.0 a kg, which is "mysterious".

Benefits of the duty cuts on edible oils and dates should be delivered to the consumers, the consumer-rights campaigner said.

He said all kinds of duties on rice import should be cut for now when the global prices hit a 15-year high.

"Onion prices showed a hike by Tk 30 a kg just in a day but we found no action against the market manipulators," the CAB official notes.

He puts high emphasis on strict market monitoring to give the consumers a comfort during this tough ride.

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