Spice prices unexpectedly dip before Eid

Spice prices are exhibiting an unexpected downtrend less than a month ahead of Eid-ul-Azha – the second largest religious festival in the country.

Spice prices usually spike before Eid at Chattogram's Khatunganj market – the country's major wholesale hub of spices and other food commodities – and elsewhere in the country, as opportunistic traders move to cash in on the surge in demand for essential cooking ingredients.

Instead of rising, the prices this year have dropped amid the pandemic. Wholesalers and retailers in Dhaka and port city Chattogram said their sales have plummeted up to 60 percent.   

Dhaka's Moulvibazar spice market traders said demand for cooking essentials was lower than in usual times. Meanwhile, Khatunganj traders said they were not getting enough buyers compared to the same period in previous years.

Feasts at weddings or picnics used to purchase spices in bulk. Additionally, restaurants and eateries were some of the main customers for spices. As social gatherings have been suspended and restaurants are struggling with low turnout of diners since their reopening in June, bulk sales of spices have dropped.      

On top of that, spice sellers said the novel coronavirus pandemic has slashed people's purchasing capacity and, like with Eid-ul-Fitr this year, potential customers are not too concerned about the upcoming festival.

Bangladesh Spice Traders Association President Mohammad Enayet Ullah said spice sales on the international market have fallen 30 percent due to low demand.   

"Our sales on the domestic market plunged at least 50 percent," Enayet Ullah told The Business Standard.

Traders in Dhaka's Moulvibazar spice market – the biggest spice wholesale hub in the capital – said they get sale orders from different parts of the country before the two Eids. However, this season is an exception.  

Traders from all over the country used to flock to Khatunganj at least one month prior to Eid. The wholesalers would buy spices in bulk and bring them to markets across the country.

To meet the spiked demand, Khatunganj businessmen stocked spices, targeting the Eids, as they said Eid sales were the lifeblood of their businesses.

However, the wholesale hub, this time, remains almost deserted compared to previous years. A number of spice traders are fearing unprecedented losses with plenty of cooking essentials in stock.      

"Most of the traders have enough spices stocked to target Eid sales. However, the customers have yet to appear as Eid is less than a month ahead. The pandemic seems to have jeopardised everything," said Khatunganj spice trader Paritosh Ghosh.          

In the meantime, former president of Khatunganj market traders' association Mohammad Solaiman Badsha summed up the reasons for the price fall.

"Spice prices fell on the international market while our domestic demand declined. Additionally, many have smuggled in the cooking ingredients from neighboring countries for Eid sales. These have all contributed to the price fall," he told The Business Standard.

Solaiman said the number of their buyers has dropped by a third and spice prices are likely to fall further.   

In the meantime, spice importers said the cooking essentials already entered the Khatunganj market two to three months ago. There is no crunch in supply, and, basically, a fall in demand has prompted the crisis.      

Spice importer Omor Faruk Siddique told The Business Standard, "Most of the businesses have more stock than demand. The transportation crisis is compounding this. The market is unlikely to heat up even if demand surges just before Eid."

Meat dishes are a must for Eid celebrations and those items hike the demand for: cardamom, cumin, cinnamon, cloves, nutmeg, and black pepper. Imports meet the domestic demands as none of the spices grow in Bangladesh.  

Bangladesh imports cumin from India and Middle-Eastern countries. Indian cumin at Khatunganj was Tk266-270 per kilogramme – and stood at Tk255-260 for the same amount last week. Syrian cumin was Tk350 per kilogramme and dropped to Tk340 per kilogramme last week.       

Guatemalan cardamom is in higher demand on the local market. This variety was at Tk2,450-3,500 per kilogramme, which is Tk15-18 less than the previous week. 

Importers mostly bring in cinnamon from China and Vietnam. Vietnamese cinnamon was Tk340-350 per kilogramme while black pepper was Tk368-370 per kilogramme and cloves Tk675-678 per kilogramme.

The state-owned Trading Corporation of Bangladesh (TCB) data says, cardamom, clove, bay leaf, cumin, and cinnamon prices have fallen 14.63 percent, 20.51 percent, four percent, 10.23 percent, and 1.18 percent, respectively, in one month. Prices of garlic and ginger, two cooking staples in Bangladesh, have also reduced.             

However, Khatunganj's traders said bay leaves, black seeds and fenugreek seeds prices rose there slightly.    

Khatunganj Trade Association General Secretary Syed Sagir Ahmed observed that there was no chance for the spice market to retrieve its momentum until the pandemic was over.

In the meantime, the Consumer Association of Bangladesh (CAB), a volunteer organisation dedicated to protecting consumers' interests, thinks unscrupulous traders may hike spice prices any time before the Eid. The organisation asked the local administration to intensify its market monitoring.              

CAB Vice-President SM Nazer Hossain said traders hiked cardamom prices though the demand was low. A mobile court fined those traders last week.       

"We have enough spice stocks. Now we have to ensure proper market monitoring to keep the prices stable," he added.