Wholesale prices of Ramadan essentials drop, with little effect on retail market

Prices of several essential items that remain in high demand during Ramadan have notably decreased in the wholesale market over the past couple of weeks, but these price reductions have had little effect on the retail market. 

According to traders, different types of pulses such as chickpeas, khesari, masur and moong, as well as sugar and flattened rice, have all experienced a decline in prices ranging from 5% to 15% in Khatunganj, the country's largest wholesale market for consumer goods. 

Despite this, these items are still being sold at their previous prices at retail shops in the port city and other parts of the country.

At the Khatunganj wholesale market, Tanzanian chickpeas are currently being sold for Tk70-72 per kilogram, down from Tk95 at the beginning of Ramadan. 

Additionally, the wholesale prices of khesari, masur (desi), and moong dal per kilogram have decreased to Tk65, Tk125, and Tk80, in that order, from Tk80, Tk136, and Tk110 over the last two weeks. 

The price of good quality flattened rice has also dropped by Tk5 to Tk48 per kilogram, while the price of sugar has fallen by Tk3 to Tk107 per kilogram.

Despite these price drops, retail shops in the port city are still selling these essential items at higher prices. 

For example, chickpeas are being sold for Tk90-95 per kilogram, khesari for Tk85, masur for Tk140-150, moong for Tk130-140, flattened rice for Tk65, and sugar for Tk115 per kilogram on Sunday.

Traders have said that although there were sufficient imports, importers hiked the prices of essentials a month before Ramadan due to increased demand. However, after Ramadan began, the sales of these products gradually decreased, and the prices also started to decrease.

SM Nazer Hossain, vice president of the Consumers Association of Bangladesh (CAB), told TBS that consumers tend to shop for the entire month before or at the start of Ramadan, leading to a gradual increase in prices from the wholesale to the retail level. 

However, sales have slightly fallen at the wholesale level since the second week of Ramadan, resulting in a decrease in prices.

Mentioning that they bought products from importers at high prices before the start of Ramadan, wholesalers based in Kahtunganj told TBS that they made some profit at the beginning of Ramadan as the demand was high, but now they are being forced to sell products at a loss since demand has been on the decline.

Azizul Haque, owner of Haque Trading in Khatunganj, said wholesalers bought Australian chickpeas from importers at Tk3,000-3,100 per maund before Ramadan, which has now dropped to Tk2,300-2,400. 

Even though importers made profits by selling the products in the market after import, wholesale traders are now facing losses due to the decrease in sales.

As per information provided by the Tariff Commission, the country's annual demand for chickpeas is 1.44 lakh tonnes, with half of it concentrated during Ramadan. 

However, data from the National Board of Revenue show that about 1.5 lakh tonnes of chickpeas were imported through Chattogram port and various land ports in the first two and a half months of 2023. Earlier, in the July-December period of this fiscal year, only 20,000 tonnes of chickpeas were imported. 

Traders expect that total import of chickpeas for FY23 will reach around 2 lakh tonnes by the end of Ramadan.

According to traders, around 80% of the country's total demand for chickpeas is usually met through imports from Australia, with additional imports from countries such as India, Myanmar, Canada, Ethiopia and Bhutan. 

However, for the past few months, traders have been importing chickpeas from India as imports from Australia have been disrupted by the dollar crisis.

Just in the last three months, the amount of chickpea imports has exceeded the total annual demand of the country. 

However, sales have not kept up with the increase in imports, leaving importers with large stockpiles of unsold chickpeas. They are concerned that storing these chickpeas for a long time will result in substantial losses.

Mahbubul Alam, president of the Chattogram Chamber of Commerce and Industry, stated that he has not seen such a large-scale import of chickpeas from India in the last 15 years. 

Chickpeas are currently being sold at a loss of Tk10 per kg compared to the import price, as supply exceeds demand in the market, he said.

SM Mohiuddin, general secretary of Chattogram Pulses Mill Owners Association, estimates that nearly half of the imported chickpeas this year will remain unsold.