Why dates are still costly this Ramadan despite duty cuts, stable global production

On its first day in office, the newly elected government made controlling commodity prices a top priority. But by the time Ramadan kicked off, the price of dates — a Ramadan staple — had soared significantly, with wholesale prices jumping to Tk50-70 per kg, while retail prices went up to Tk100 per kg. 

To prevent this price hike, the government had decided to cut customs duty on imported dates from 25% to 15%. A further reduction was made in advance income tax. 

Yet these efforts could not prevent prices from sharply rising over the past two weeks, raising the question: If import duties have fallen and global supply conditions remain stable, why are local prices rising?

Majority of Bangladesh's dates come from UAE, Iraq, Saudi Arabia, and Egypt, where output has remained stable in recent years. 

Furthermore, despite broader geopolitical tensions and fluctuating shipping costs, the global date market experienced incremental export growth in Asian markets.

But importers argue that they cleared the current stock in circulation before the new duty structure took effect. Hence, they paid higher taxes and priced the products accordingly. The timing gap between policy announcement and market availability may have diluted the intended impact of the duty cut, they say. 

"There is always a lag between policy relief and retail adjustment," said Mohammad Shafiul Azam Tipu, an importer based in Chattogram. "Shipments cleared under the previous duty regime cannot suddenly be repriced at a lower cost."

Congestion and operational disruptions are also major cost drivers, according to industry insiders. 

Port congestion leads to delays which increase demurrage charges, as fees have to be paid for containers that remain at port beyond their allotted time. The supply chain, in due course, bears the brunt of this cost. 

When the seasonal demand spikes, transport costs edge up as well. Ramadan traditionally triggers a higher consumption of dates, chickpeas, sugar, and edible oils. The sudden rise in demand, when combined with logistical frictions, often creates room for speculative behaviour.

Trade experts note that Bangladesh's import-dependent commodities markets are particularly sensitive to supply chain inefficiencies. They warn, when global supply is adequate, local bottlenecks can create artificial scarcity. That perception alone can drive prices higher. 

Since the upward price pressure extends beyond just dates every year, to combat this, the government has come up with special retail prices for key essentials and expanded open market sales through the Trading Corporation of Bangladesh (TCB). Mobile trucks and designated dealers are expected to provide subsidised products during Ramadan.

However, economists warn that such interventions often serve as temporary stabilisers rather than structural solutions.

When monitoring is weak and enforcement inconsistent, policy relief can be absorbed at intermediary levels instead of reaching consumers. The effectiveness depends on how quickly authorities can track and respond to market distortions.

As Ramadan consumption patterns are predictable, traders anticipate the demand surge and build inventories in advance. When stockpiling becomes a regular business strategy, this leads to a short-term scarcity. 

In a limited competition market, supply chains remain concentrated among a small group of importers and wholesalers, giving autonomy to intermediaries to determine prices. Retailers and consumers have limited authority here. 

A senior TCB official involved in market monitoring acknowledged that price enforcement is challenging during high-demand periods. "We are conducting regular inspections, but market dynamics during Ramadan are complex," he said.

Furthermore, when structural inefficiency is persistent, policy adjustment alone may not guarantee price stability. This episode of price escalation is a recurring dilemma in Bangladesh's commodity management. 

A duty reduction of 15 percentage points can be significant on paper. When shipments that cleared earlier are priced higher, it leads to port congestion, and traders forecast demand-driven margins. A 15 percentage-point duty reduction is significant on paper. Yet if shipments cleared earlier are priced higher, ports remain congested, and traders forecast demand-driven margins, the immediate consumer benefit will become negligible. 

The broader question, then, is whether Bangladesh's Ramadan price volatility is primarily global or domestic in origin.

Available evidence suggests the latter.

When global production is steady, leading producer nations face no export regulations, and the surge in local prices closely correlates with timing mismatches, logistics bottlenecks, and demand-season speculation, international supply constraints play a minimal role in this price escalation. 

The lesson from this can be twofold.

If tariff adjustments are timed well ahead of peak seasons to allow lower-cost shipments to enter the market smoothly, the crisis can be minimised.

And structural improvements in port efficiency are crucial to yield more durable price stability. Periodic fiscal interventions will not be required once the structural improvements are made. 

While competition among importers is necessary, stringent measures against hoarding practices could also bridge the gap between policy measures and retail outcomes. 

Consumers continue to closely monitor prices as Ramadan approaches. The government vows to protect consumers' interests as well. Whether the market eventually corrects itself once lower-duty shipments reach retail shelves is what people are looking forward to.