How fruits are now a luxury due to frequent tariff hikes

Infographic: TBS

Having fruit has currently become a luxury for the common consumer – no matter how necessary its nutrition is – as the government has been raising tariffs on imported fresh fruits year after year, driving up the prices and contributing to a steady decline in imports.

In 2021-22, the tariff on fresh fruit imports was 89.32%, but it has now risen to 136.20%, marking a sharp increase over the past three years.

This means if an importer buys 1kg of apples for Tk100 from the international market, they must now pay an additional Tk136.20 in tariffs.

Adding transportation, bank loan interest, and other expenses, the cost of that Tk100 apple reaches at least Tk250 by the time it enters the wholesale market.

The frequent increase in tariffs has significantly raised import costs, affecting both businesses and consumers. Importers are facing losses due to declining sales.

Earlier, on 4 and 5 February, the Bangladesh Fresh Fruits Importers Association observed a suspension of fruit clearance from all ports in the country, protesting the government's decision to increase VAT and additional import duties on fruits.

The association's President Muhammad Sirajul Islam, told TBS that during the clearance suspension, 100 fruit containers were stacked at Chittagong Port, while 75 fruit trucks were stuck at land ports, including Benapole.

Although importers resumed clearance to avoid further losses, they remain concerned about sales during Ramadan.

The association has submitted a memorandum to the NBR, demanding the withdrawal of the additional supplementary duty and VAT on fruits. If their demand is not met by 13 February, fruit clearance will be stopped indefinitely from 14 February, Sirajul said.

How tariff hikes drive up costs

According to the National Board of Revenue (NBR), the tariff on imported fruits such as apples, oranges, grapes, pears, and pineapples was 89.32% in the fiscal 2021-22. It increased to 113.80% in FY23 and was further raised twice in the current financial year, reaching 136.20% on 9 January.

The latest tariff increase includes a customs duty of 25%, a supplementary duty of 30%, a 15% VAT, a 10% advance income tax, a 5% advance tax, and a regulatory duty of 20%.

However, the total tariff does not result from a straightforward addition of these tax rates separately. Instead, some duties – such as customs duty, regulatory duty, and advance income tax – are first applied to the assessed value of the imported fruit.

The supplementary duty is then calculated on this new total, followed by VAT and advance tax, which are imposed on the final amount. This compounding effect significantly increases the overall tariff burden.

Nuruddin Ahmed, general secretary of the Bangladesh Fresh Fruits Importers Association, said, "In the last one year, the NBR has increased the supplementary duty on imported fruits by Tk60 to Tk70 three times, considering them luxury items. Due to the yearly rise in tariffs, fruits are now beyond the reach of ordinary consumers. Apples, grapes, and oranges are baby food and essential for patients. How they can be treated as luxury items is beyond our understanding."

Sharp decline in fruit imports

Analysing import data, it is evident that fruit imports through Chittagong Port have declined by 77,471 tonnes (18.56%) over the past five years.

According to Chittagong Port Plant Quarantine Station data, in the first half (July-December) of FY25, 154,426 tonnes of various fruits, including apples, oranges, malta, grapes, mangoes, pears, and dragon fruits, were imported through the port.

In FY24, total fresh fruit imports stood at 339,894 tonnes. In previous years, imports were recorded at 386,410 tonnes in FY23, 480,213 tonnes in FY22, 465,322 tonnes in FY21, and 417,365 tonnes in FY20.

Bangladesh imports 38 types of fruits from 22 countries, with 95% being apples, malta, oranges, grapes, and pomegranates. The remaining 5% includes pears, kinnows, wood apples, avocados, rambutans, and kiwis.

Due to the high tariffs, demand for imported fruits has declined, causing many importers to incur heavy losses. Traders said at least 50 importers in Chattogram's fruit market have gone bankrupt and left the business over the past three years.

Traders struggle as prices soar

Traders at Chattogram's Station Road wholesale fruit market reported that fruit prices have surged by Tk50-100 per kg in the past week alone.

South African Royal Gala apples are now selling at Tk370-380 per kg, up from Tk260-280 last week, marking an increase of nearly Tk100 per kg. Imported green apples are selling at Tk370 per kg, Tk90 higher than last week's price of Tk280.

Oranges, previously sold at Tk180 per kg, now cost Tk250, a Tk70 increase. Pears have risen by Tk50 per kg, now selling at Tk330 instead of Tk280. Green grapes have increased from Tk260 to Tk320 per kg, a Tk60 rise. Pomegranates have gone up by up to Tk75 per kg, now priced between Tk350 and Tk425.

Jinnat Ali, a Chattogram-based fruit importer and owner of JM Trading, said many traders are not clearing imported fruits due to the sudden tariff hike.

"If we sell at current market prices, we will incur heavy losses. So, we are waiting for the prices to rise. However, there is uncertainty over whether the fruit, imported at a high cost, will sell during Ramadan due to the increased tariffs," he said.

Junaidul Haque, publicity secretary of the Chattogram Fruit Traders Association, said the government has repeatedly raised tariffs, citing the Covid-19 pandemic and later the dollar crisis.

"Imports have declined sharply. A trader who once imported 12 containers of fruit per month now imports only two or three. This has created a shortage in the market, which will worsen during Ramadan," he told TBS.