Home ›› 09 May 2022 ›› Front
Bangladesh imported significantly more essential commodities – rice, wheat, edible oil, sugar and onions – in the first nine months of FY22 when compared year-on-year, but local consumers are paying nearly two to three times the international prices for these goods.
Analysis of a latest report by the commerce ministry’s Price Monitoring and Forecasting Cell further reveals that when the global market prices are taken into account, Bangladeshi consumers are currently paying almost double per kg for sugar and lentils, and triple for onions.
The cell had presented this report at a meeting that took place on April 24 this year, sources told The Business Post, adding that it contains data from the Bangladesh Bank.
According to the central bank, importers had opened letters of credit (LCs) for 8.13 lakh tonnes of rice during the Jul-Mar period of FY22, and imported 10.42 lakh tonnes. The country had imported only 4.73 lakh tonnes of rice against LCs for 16.68 lakh tonnes the same period last FY.
So, Bangladesh’s rice imports rose 5.69 lakh tonnes in these nine months.
In July-March of FY22, importers opened LCs for 55.94 lakh tonnes of wheat, and imported 45.13 lakh tonnes. The country had imported 35.79 lakh tonnes of wheat against LCs for 52.37 lakh tonnes the same period last FY, indicating that wheat imports rose by 9.34 lakh tonnes.
During the same period this FY, importers opened LCs for 14.75 lakh tonnes of edible oil, and imported 12.30 lakh tonnes of the kitchen ingredient. Bangladesh had imported 11.53 lakh tonnes of edible oil against LCs opened for 14.53 lakh tonnes in the same period of FY21.
Despite Bangladesh’s edible oil imports rising by 77,000 lakh tonnes in the first nine months of this FY, severe supply crunch of this kitchen essential in local markets has become a frequent occurrence.
Traders also opened LCs for 19.92 lakh tonnes of sugar in these nine months, and imported 15.74 lakh tonnes. The country had imported 15.76 lakh tonnes of the kitchen ingredient against LCs for 14.28 lakh tonnes the same period last FY.
The data indicates that Bangladesh’s sugar imports rose by nearly 1.5 lakh tonnes year-on-year.
Though the country’s onion market had suffered instability in FY21, domestic markets have been getting a good supply of local onions this year.
Despite the availability of local onions, importers opened LCs for 5.19 lakh tonnes of onion, and imported 8.82 lakh tonnes in July-March of FY22. The country had imported 4.44 lakh tonnes of onions against LCs for 5.69 lakh tonnes the same period last FY.
The Bangladesh Bank data further shows that in these nine months, importers had opened LCs for 2.4 lakh tonnes of lentils, and imported 2.2 lakh tonnes. The country had imported 3.2 lakh tonnes of lentils against LCs for 2.46 lakh tonnes the same period last FY.
Local prices much higher than international rates
An analysis of data from the Bangladesh Trade and Tariff Commission, and the Trading Corporation of Bangladesh shows that per kg rice costs Tk 36 – when converted from USD – in the international market, but local consumers are buying the essential for Tk 45 – Tk 48 per kg.
Similarly, per kg wheat costs Tk 42.79 in the international market, but local consumers are buying flour for Tk 53 – Tk 56 per kg.
A litre of unrefined soybean oil costs Tk 159.21 in the global market, but local consumers are currently paying more than Tk 200 per litre for both the bottled and loose varieties of soybean oil.
The price of a kg of refined sugar in the international market is around Tk 45.73, but in Bangladesh, the commodity is being sold for double the price – at around Tk 80 per kg.
Domestic consumers are also paying two to three times the international prices for onions in local markets. The price of onions was Tk 16.39 per kg in the global market last March, but local traders were selling the commodity for Tk 45 – Tk 60 per kg.
Onion prices in the international market have now dropped to Tk 8.36 per kg, but Bangladesh’s traders are now selling the kitchen ingredient for Tk 30 – Tk 35 per kg, which is nearly three times the global rate.
The price of per kg lentils in the global market is around Tk 55 – Tk 59, but local consumers are buying imported lentils for Tk 95 – Tk 105 per kg.
Though local consumers bear the brunt of international market price hikes, they receive no respite when rates go down globally, insiders say, adding that the local businesses and traders are taking advantage of the consumers and silently raking in significant profits.
Sources further say that the officials, while attending the Price Monitoring and Forecasting Cell meeting held on April 28, had remarked that a good volume of sugar, gram, and lentils has been imported [this FY], and there is no possibility of supply shortages happening for these goods.
The officials had however said that there is a supply shortage of edible oil and refiners are providing adequate supply of the commodity in the local market. Mentioning Indonesia’s recent move to halt all palm oil exports, they pointed out the need for an alternative source.
