The holy month of Ramadan is set to bring a new headache for the government, which has already been straining to import daily necessities due to the ongoing global economic crisis stemming from the Russia-Ukraine conflict.
Demand for major commodities, especially chickpeas, lentils, sugar, and edible oil, is usually twice as high as usual during Ramadan in the country. According to market analysts, the commodity market could face turbulence if initiatives are not taken immediately.
Khatunganj, the country's largest commodity wholesale market, controls the trade of about half of all products. Several industrial groups in Chittagong are involved in the import of the items sold at the market.
Traders expressed concerns about the supply of commodities for the Ramadan after learning that there was a delay in clearance of some imported consumer items at Chittagong Port due to a dollar crunch. Some have already started stockpiling products from the market to sell during the holy month.
Chittagong Port has been waiting for 10 to 58 days to release the commodities. Following news that the clearances of the shipments had been delayed, wholesale prices of daily commodities such as sugar and edible oil increased by Tk50-100 per maund.
According to the Ministry of Commerce, the import of unrefined sugar in the last six months of 2022 fell by 207,946 tons from the same period in 2021. Furthermore, crude palm oil imports fell by 132,939 tons, chickpea imports by 14,164 tons, and date palm imports by 390 tons.
In the last three months of 2022, refined soyabean oil import letters of credit (LCs) dropped by 28% to 375,999 tons, crude soybean oil by 47% to 88,724 tons, and refined soybean by 23% to 2,373 tons.
Soybean seeds import LCs decreased by 83% to 78,020 tons. Crude palm oil LCs decreased to 230 tons, chickpea LCs by 47% to 75,319 tons, and dates LCs by 30% to 21,983 tons.
Items imported through LCs in October, November, and December of the previous year, as well as the LCs of January this year will be supplied to the market throughout Ramadan. As a result of the low imports, product prices have already begun to climb.
Traders are also concerned that there will be a supply crisis if customers begin purchasing commodities at least two weeks before Ramadan.
Asked about the matter, Mahbubul Alam, president of the Chittagong Chamber of Commerce and Industries, said the commodity market is at its peak during Ramadan. Throughout the month, the most traded commodities are sugar, edible oil, and lentils.
“Traders are in a bit of a bind as a consequence of the difficulty in opening LCs before Ramadan, despite having sufficient stock in the past. The government has already given instructions to Bangladesh Bank to prioritize consumer goods imports,” he said.
He believes there is a chance of the necessary commodities arriving in time for Ramadan if imports begin immediately.
Saiful Islam, proprietor of M/S Maa Enterprises in Chittagong's Kazir Dewri Bazar, said the commodities market has returned to a semblance of stability recently, but wholesale dealers may face losses due to insufficient supply during Ramadan.
“As a result, many individuals are already stockpiling commodities,” he added.
