Fresh fruit imports fell 50% in the four months to August as the government tightened rules on the purchase of these non-essential items to ease pressure on depleted foreign exchange reserves.
The National Board of Revenue raised the regulatory duty on imports of various fresh fruits to 20% from 3% previously, while Bangladesh Bank imposed a 100% cash margin requirement for opening letters of credit for imports of these products.
In April this year, fruit imports through the port of Chattogram averaged around 70,000 tonnes. As a result of these restrictions, imports fell to 35,000 tons within a month. The downward trend continued over the next two months and fell to 21,571 tonnes in July, according to Chattogram Customs.
In August, fruit imports increased by 55% month-on-month to 33,454 tons, but the quantity remained well below that of April.
The companies say the overall import duty on fresh fruit has now risen to 113% from just over 89% due to the 20% regulatory duty imposed by the government in May this year.
Also, they are now required to complete a full deposit before opening LCs for fresh fruit imports. Previously, the margin varied between 10% and 20%, they note.
This is why small and medium entrepreneurs have now stopped fruit imports as they are unable to maintain such a high cash margin.
Bangladesh imports various fresh fruits, such as apples, oranges, tangerines, grapes and pears, mainly from China, Australia, South Africa, Brazil, Argentina, New Zealand, from Afghanistan and France.
Importer Zinnat Ali, owner of JM Trading, told The Business Standard: “I would import fruit worth Tk 2 crore per month by making a 20% down payment against opening LC. But the 100% cash margin made it impossible for small importers like me to continue imports.”
A drastic drop in fruit imports affected retail sales. Billal Hossain, a retail fruit trader in Baluchara market in Chattogram town, said the prices of imported fruits have increased between Tk 100-150 per kg over the past few months. At the consumer level, fruit sales fell by more than half.
Within five months, prices for apples soared to Tk 250 per kg from Tk 180, malt to Tk 220 per kg from Tk 160 per kg, orange to Tk 250 per kg from Tk 200, grapes to Tk 500 per kg of 300 Tk, he noted.
Jonaidul Haque, a fruit importer, said, “We used to import fruit worth Tk 30 crore on average every month. We are now facing financial losses as our imports have dropped drastically in recent months.
Touhidul Alam, general secretary of the Falmondi fruit market traders association in Chattogram, said that normally 27 crore Tk of fruit were sold in Chattogram per day but sales have now halved.