Import curbs drive up spice prices

Toughening the rules of importing goods due to the dollar crisis has created a shortage of spices in the local market, causing prices of all types of imported spices to Jump sharply over  the last month.

Importers and traders fear that the spice market will turn more volatile in the forthcoming Ramadan if the dollar availability for imports is not ensured.

Traders based in Chattogram's Khatunganj – the largest wholesale goods market in the country – said spice prices have never spiraled up in the country in a fashion like this year's. 

Even many experienced traders are unable to predict what might be the market situation in the days ahead.

Md Mohiuddin, general secretary of Chaktai-Khatunganj Aratddar General Traders Welfare Association, said the import of spices has decreased by about 30% in the last four months.

Md Sekandar, a spice importer based in Khatunganj, told The Business Standard, "There are some complications in opening letters of credit (LC). The cost of importing spices has increased by up to 35% due to the volatility in the dollar price, resulting in a decrease in the import of the products.

"If the banks do not cooperate now in opening LCs, there will be a negative impact on the market in the coming Ramadan and Eid-ul-Fitr."

Arif Mohammad Forkan, the owner of MI Trading in Khatunganj, said, "There has been a shock in the daily supply due to the decrease in the import rate. Many traders have been buying spices at a higher price from the wholesalers who have the products in stock ahead of Ramadan, which is deepening the crisis."

Recently the central bank has ordered to ease the import LCs of necessary commodities due to the Ramadan, but many businessmen do not feel assured about it.

Importer Md Sekander told TBS, "If you want to get the products in Ramadan, you have to open the LCs now, but the banks are not giving that opportunity to everyone. Only those who have good relations with the banks or big merchants are having a monopoly in the market by taking advantage of the restrictions on import. Businessmen feel that there is no possibility of improvement in this situation in the future."