Tariff Commission urges monitoring of lentils, chickpeas ahead of Ramadan

Highlights

• Imports of lentils, chickpeas, soybean oil up
• Imports of palm oil, sugar, dates down
• Chickpeas currently sold at a 35% higher price
• Price of palm oil rises by 24%,
• Soybean oil price up 1.46%

The Bangladesh Trade and Tariff Commission has recommended that the Ministry of Commerce monitor the stock and supply of lentils and chickpeas ahead of the upcoming Ramadan due to their rising prices in the global market.

It anticipates that the prices of all essential commodities, except lentils and chickpeas, will remain stable during the fasting month for Muslims.

On 9 January, the commission made the recommendation in a letter to the secretary of the Ministry of Commerce. 

Along with this, it submitted an analytical report detailing the international and local market prices of commodities with increased demand during Ramadan, the actual import volumes from 1 July 2024 to 5 January 2025, the number of letters of credit (LCs) opened during the period, and the anticipated demand for Ramadan which will span the entire month of March.

Due to increased demand for sehri and iftar, the consumption of chickpeas, dates, lentils, edible oil, and sugar rises significantly during Ramadan compared to other months.

The government has taken some measures to ensure adequate imports before Ramadan. These include reducing tariffs and taxes, lowering LC margins, and expediting clearance at ports. 

Additionally, there is a rise in demand for puffed rice, chicken, eggs, green chillies, onions, aubergines, cucumbers, and lemons during the month.

The commission reported that during the current fiscal year 2024-25, from 1 July to 5 January, 2,51,000 tonnes of lentils were imported, which is 61,000 tonnes more than the same period in the previous fiscal year. 

During the same period, 48,980 tonnes of chickpeas were imported, an increase of 31,534 tonnes compared to the previous fiscal year. 

Despite the higher imports of these two commodities, the commission emphasised the need to monitor their stock and supply.

The report states that from 1 July to 5 January of the current fiscal year, 3,84,000 tonnes of crude soybean oil were imported, which is 1,09,000 tonnes more than the same period in the previous year. 

During the time, 7,11,000 tonnes of palm oil were imported, a decrease of 2,64,000 tonnes compared to the corresponding period of the previous year.

Similar to palm oil, sugar imports have also decreased compared to the previous year. Between 1 July and 5 January of FY25, a total of 6,64,000 tonnes of refined and raw sugar were imported, which is 2,00,000 tonnes less than the same period in the previous fiscal year.

Another significant item for iftar, dates, has also seen a decline in imports compared to the previous year. As of 5 January in the current fiscal year, 5,883 tonnes of dates were imported, whereas 9,628 tonnes were imported during the same period last year.

Meanwhile, the opening of LCs for lentils, palm oil, and sugar during November and December was lower compared to the same period in the previous year. However, the LCs opened for chickpeas and dates during the same months were higher than the previous year. 

The products corresponding to these LCs are expected to arrive in the country between the last week of January and February, ensuring their availability before the start of Ramadan.

The commission states that although the price of lentils has not increased compared to last year, chickpeas are currently being sold at a 35% higher price. Additionally, the price of palm oil has risen by 24%, and soybean oil by 1.46%. 

However, despite a reduction in sugar imports, its price in the domestic market has decreased by 12.28% compared to the same period last year, owing to lower prices in the international market.

The report states that the demand for chickpeas and lentils is 1,00,000 tonnes each as their demand arises as an ingredient for halim and other iftar preparations.

The demand for dates is 60,000 tonnes. The demand for sugar and edible oil is 300,000 tonnes each. Additionally, 5,00,000 tonnes of onions are required during the month.

The commission analysis mentions that the price of onions is falling as the production season for murikata (an early variety of onion) has began. The supply of winter vegetables has increased, reducing the demand for eggs, which has helped keep egg prices stable. 

As the price of edible oil continues to decrease in the international market, and with the reduction of tariffs on edible oil imports, there is a possibility of a price drop for edible oil during Ramadan. 

The price of imported rice is expected to fall once it enters the market. With the increase in LCs for date imports, it is anticipated that the price of dates will be lower this Ramadan compared to last year. 

The report, citing the World Bank's Commodity Price Pink Sheet, mentions that there are various indications in the international arena suggesting that the war in Ukraine might end, which has created the possibility of normalising the supply of many goods. 

If prices decrease in the international market, it is expected to have a positive impact on the Bangladeshi market as well. 

However, the report highlights that maintaining the value of the foreign currency is essential for realising these benefits.

An official of the Consumers Association of Bangladesh, speaking on condition of anonymity, told TBS, "Every year, the Tariff Commission and the Ministry of Commerce assure that commodity prices will remain stable before Ramadan. However, prices end up increasing before the start of Ramadan and continue to rise throughout the month."

The official pointed out that government data and the market situation are often not aligned.