Pulses price skyrockets, traders point to dollar crisis impact

Amid the current volatile consumer products market, the prices of pulses have surged by Tk20-Tk50 per kg in the wholesale market of Chattogram within one month, with the most significant increase observed in the past week, according to traders.

Importers and traders attribute this rising import bills due to the ongoing dollar crisis, impacting the overall price of pulses, a significant portion of which is imported to meet domestic demand.

Of all pulses, mung dal has experienced the most significant price increase, currently selling at Tk160 per kg in the wholesale market of Chattogram's Khatunganj. This marks a notable increase from Tk110 per kg just a month ago.

The price of peas has risen by Tk20 per kg, now priced at Tk70 per kg compared to Tk50 per kg a month earlier.

Presently, coarse lentils (Australian) are priced at Tk102 per kg, while local and Indian fine lentils range between Tk134 and Tk138 per kg. However, in mid-December last year, coarse lentils were available at Tk90 per kg, and fine lentils were priced at Tk120 per kg.

Additionally, a month ago, chickpeas were below Tk90 per kg, but now they are being sold at Tk100 per kg.

Meanwhile, in the retail markets in Chattogram, fine lentils are priced between Tk150 to Tk155 per kg, coarse lentils at Tk110 per kg, mung dal at Tk180 per kg, peas at Tk90 per kg, and chickpeas at Tk110 per kg.

Aman Ullah, proprietor of Messrs Aman Enterprises in Khatunganj, said the prices of almost all varieties of pulses began rising about two weeks before the 12th national elections on 7 January. However, post-election, these prices have escalated abnormally, surpassing all previous records.

He attributes this price surge to the ongoing dollar crisis, explaining that banks are reluctant to open letters of credit for the import of consumer goods by ordinary traders.

Consequently, the import of consumer goods has become reliant on a few companies, leading to abnormal price increases despite normal demand, driven by importers seeking extra profits, he added.

Abul Bashar Chowdhury, chairman of BSM Group, a consumer goods importer, said the booking price of pulse products has risen in the international market. The devaluation of the taka against the dollar has further increased import costs. Despite having a margin of 120%-125%, importers are facing challenges in opening letters of credit for importing goods.

Furthermore, the fluctuating dollar prices have led many importers to reduce their imports. Consequently, the decrease in the import of goods has contributed to an increase in the overall price of goods, he said.

A manager at a Khatunganj branch of a private bank, seeking anonymity, told TBS, "Many businessmen have sought to open letters of credit for importing consumer goods, but the prevailing dollar crisis hinders our ability to issue LCs to all applicants."

He further said the approval for opening import letters of credit now relies on the relationship between the bank and the importer.

Acknowledging the situation, various bank officials in Khatunganj conceded that while the Bangladesh Bank has set a maximum exchange rate for the dollar, most banks are struggling to adhere to it.

As per the Ministry of Agriculture, the country's market offers 7-8 types of pulses, including lentils, mung dal, peas, and chickpeas. Presently, the annual demand for pulses in the country ranges from 25 lakh to 26 lakh tonnes, with around 10 lakh tonnes produced domestically. The remaining 15-16 lakh tonnes are imported.

According to the National Board of Revenue, only 74,252 tonnes of peas were imported in the first six months (July-December) of the current fiscal year, significantly lower than the 2.71 lakh tonnes imported during the same period last year.

During July-December FY24, 1.63 lakh tonnes of lentils were imported, a slight increase from 1.57 lakh tonnes during the same period of FY23. Additionally, in FY23, 15,384 tonnes of chickpeas were imported during this period, while in the same timeframe of FY24, the import surged to 37,694 tonnes.