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Delayed clearance puts traders at risk of losses

Md Saidur Rahman . Chattogram
02 Mar 2024 22:13:59 | Update: 02 Mar 2024 22:13:59
Delayed clearance puts traders at risk of losses
— Courtesy Photo

Traders imported dates to cover the elevated demand of Ramadan, but did not release them on time in hopes of getting a duty exemption. The duty, however, did not decrease as expected, and traders may face significant losses if they fail to sell off their imports.

On the other hand, if the supply in the market increases suddenly, the price of dates will most likely fall.

The market did not have enough supply until January this year. So, dates imported previously were sold for higher prices when compared year-on-year. The lack of supply in the wholesale market forced retailers to buy dates at higher prices.

According to traders of Fal Mondi, the wholesale fruit market of Chattogram, Mabrum dates were sold for Tk 3,000 – Tk 3,500 per five kg packet last year, but this year, the same variety of dates are being sold wholesale for Tk 7,500 – Tk 8,000.

Besides, Masrook VIP (5 kg) was sold for Tk 1,700 – Tk 1800 last year, but this year, it is being sold for Tk 2,700. Medium quality dates (5 kg) used to sell for Tk 1,300 – Tk 1,400, now they are selling for Tk 2,500 – Tk 2,600.

Normal quality dates (5kg) used to sell for Tk 1,000, which are now being sold for Tk 1,600.

Ajoa dates were being sold for Tk 2,500 last year, but this year, a five kg packet of the same variety is being sold for Tk 3,200 – Tk 3,300. And Safabi (5 kg packet) is being sold for Tk 4,000, which was Tk 2,100 last year.

Jahedi date, which has the most market demand, is being sold for Tk 2,600 (10 kg), which was priced at Tk 950 – Tk 1,000 last year. Besides, the cheapest dates in the market (sacks dates) are being sold for Tk 140 – Tk 145 per kg, which was Tk 95 last year.

Market insiders say compared to the last two financial years, fewer dates have been imported or cleared from the port till January this year. Only 13,224.555 tonnes of dates have been released from Chattogram customs till January 31 – imported by 81 companies and individuals.

Plant Quarantine Station, Seaport, Chattogram said 38,991 tonnes of dates have been imported till February 25 through Chattogram port, while 84,151 tonnes of dates were imported in FY22-23.

In FY22, 88,961 tonnes of dates were imported. Most of which were redeemed before Ramadan.

For now, more than 1,000 date containers are stuck at the port as importers have not cleared them in time to take advantage of the duty reduction. As a result, Customs is seeing a slow pace in the clearance process.

Importers said these imported dates may remain unsold if they become unable to supply to the market in the next few days. They said that 90 per cent of the demand for dates throughout the country is sold in this month of Ramadan.

They faced problems after the National Board of Revenue (NBR) increased the duty on import of dates. Later, due to the application of the importers, the duty was reduced, but as it was not as expected, the strategy of keeping stock at the port did not work for the importers.

After investigation, it is known that out of 1,000 containers full of dates, more than 400 containers have been lying in various depots for two months.

Arabian Dates Factory, Royal Fresh Foods, Sapoana Food Trading Corporation, Madina Foods, Ramisa BD, Royal Fresh Foods, Eddy Fruits, and Allah Rahmat Stores have the most dates in these containers.

Among them, Bangladesh Fresh Fruits Importer Association President Serajul Islam has about 200 containers of dates that came to Chattogram at the beginning of January.

The Business Post inquired into some of the largest importers that found the Arabian Dates Factory. 

The largest importer in Chittagong, imported 19,360 tonnes of dates in FY23 with import value including duty reaching Tk 222.97 crore. The average import price of dates per kg was Tk 115.

But the company has redeemed only 25 tonnes of imported dates till January 31 worth TK 1,65,30,000 in the current financial year. The company is now selling products in the market at several times the price compared to last year.

Royal Fresh Foods Ltd imported 6,351 tonnes of dates in FY23. The import cost, including duties, was Tk 85,19,000. The average price per kg was around Tk 134. However, until January of FY24, only 191 tonnes of dates have been imported, with an import cost of Tk 80,66,000.

Additionally, Allahar Rahmat Store imported 3,824 tonnes of dates in FY23. The total import cost, including duties, was Tk 39,36,000. The per-kilogram price for this import was Tk 102.

However, the company has only imported 1,197 tonnes of dates until January of this year, with an import cost of Tk 31,89,000.

In comparison to the previous year, the importers have either refrained from importing a significant amount of dates or, if imported, have not cleared the goods from the port to avail lower duties. They are however selling the old stock in the market at a higher price.

Despite not reducing the duty, they have come up with plans to avoid clearing the goods after import. While the information mentions three companies, almost every major date importer has followed a similar strategy.

Regarding this, Serajul Islam has not responded despite several phone calls.

However, Abir, the director of Arabian Dates Factory in Chittagong, mentioned that the prices of dates have increased due to the dollar crisis and the rise in import duties.

Moreover, a significant portion of the dates imported from the Chittagong port have not been cleared, contributing to a new crisis in the market. As a result, the sales of new products are suffering.

Allahar Rahmat Store proprietor Mohammad Kamal, regarding the reduction of duties on dates, said, “There's a demand for 50,000 to 60,000 tons of dates during Ramadan. The previous duty on dates was aligned with the international market, but the current duty is significantly higher than market prices, and it has not been appropriately reduced.

“The current duty is still 43 per cent, with an additional 3 per cent regulatory duty, 15 per cent VAT, and a 5 per cent advance income tax. So, the effective duty on date imports is now costing $1,000 to $2,750 per tonne.”

Consumer Association of Bangladesh Central Committee Vice President SM Nazir Hossain said, “Dishonest businessmen, by reducing imports, are causing a crisis in the market to increase prices.

“However, dates imported last Ramadan were sold for Tk 105 per kilogram. This time, they are selling dates at three to four times higher prices. We demand prompt action against these dishonest traders.”