One-taka candy fetches huge profits for shop-keepers

The apparent shortage of coins of 1 and 2 taka denomination has given a big boost to the local candy sector, insiders said.
According to them, sales of candy, priced as low as Tk 1 and Tk 2, have led to a rise in its production many folds in the country in the last two years as such small coins virtually cannot buy anything.
Around 90 new food product companies joined the queue in the last 2 years along with the previous companies to only produce very low-quality small-priced candy taking advantage of the small Taka denomination.
Food product companies, which earlier did not produce such low-priced candy, also have gone for Tk 1 and 2 candy production.  
The country's leading company, Pran Foods, produces 20 types of low-priced candy.
"Our small-priced candy production has increased by around 20 per cent each of the last two years," Kamruzzaman Kamal (Director, Marketing of Pran) told the FE on Thursday.
Earlier, they produce 3-4 types of small-priced candy, but have increased its production to meet the growing market demand.
Some retailers in capital Dhaka told the FE that coins of small denomination have become scarce in the country for long.
They said they do it as they have no other option but to address the problem that arises when the buyer has to be given one taka as a change.
They said coin worth one-taka denomination is not easily available. They claim they have to pay 15-20 per cent extra to purchase each 100 pieces of one-taka coin box from unauthorised vendors.
Coins of one-taka denomination are disappearing fast, they said. They found many people 'preserving' such coins as a kind of savings in their houses these days as in the distant past, women in farming families used to save a morsel of rice twice a day before preparing meals.
During a visit to shops in different areas of Dhaka city, it was seen that increased production of small- priced candy is rather a deceptive way of making profits.
If a Tk 1 candy is sold, a shop owner makes 40-50 paisa profit and the profit is 80 paisa to Tk 1 if Tk 2 candy is sold.  
Sometimes, a Tk 9 cigarette brings less profit than that of a Tk 1 candy prompting all small to big shop owners to sell such small-priced candy giving eventually a big boost for the industry.
If a customer refuses to take a candy in exchange of Tk 1 coin, the shop owner usually says he doesn't have such a coin. Then he is forced to buy it.
 "I earn Tk 70 to Tk 100 or sometimes more daily due to candy sale," said Abul Kalam, a shop owner at Shahbagh crossing.
He said, "While I had to pay 15-20 per cent extra money to purchase each 100 pieces of one-taka coin box from unauthorised vendors, now I can make extra Taka 70-100 profit by pushing candy sale."
Grocery shops to makeshift cigarette shops in the city keep some plastic boxes of small-priced candy to replace Tk 1 and 2 coins.  
Mr Abul Kalam said sale representatives from around 80-90 new companies come to his shop to offer new candy seeing the huge profits.
The Nova Food Products is such a company which produces only small-priced candy.
Ahmed Foyez, its owner, told the FE the process is very simple. He bought a small-sized machine at the cost of Tk 4,00,000 and employed 3-4 people to produce Tk 1 and 2 candy at home.
"I make Tk 200,000 profit per month from my factory," he said.   
Sources at the currency department of the Bangladesh Bank (BB) told the FE Thursday there are enough coins in the market.
"Scarcity is not to blame for the push sale as shop owners themselves do it to make profits," said a senior official at the currency department.