NBR reduces tariff on onion, potato, pesticide imports to stabilise supply

In a bid to stabilise the supply of essential commodities, the National Board of Revenue (NBR) has reduced tariffs on the import of onions, potatoes, and pesticides. 

The move aims to ease market pressures caused by recent disruptions in agricultural production due to floods.

According to a press release issued by the NBR today (5 September), the import tax on onions, which was subject to a combined 10% tariff, including customs and regulatory duties, has been reduced by half, lowering the combined duties to 5%.

For potatoes, the overall tax burden has been cut from 33% to 20%, and for pesticides, the customs duty has been significantly reduced from 25% to 5%, further easing the cost of this essential agricultural input.

The NBR stated that the tariff reductions will remain in place until 30 November as per a statutory regulatory order (SRO) issued on 4 September. 

The decision comes after "important stakeholders and the concerned ministry have requested the National Board of Revenue to take measures to reduce the prices of essential commodities like pesticides, potatoes, and onions", according to the press release.

The NBR hopes these reductions will help normalise supply and bring down market prices for these essential goods, benefiting both consumers and farmers in the long run.

However, importers expressed that while this is a positive step toward stabilising the market, the likelihood of a significant price reduction is minimal.

Haji Md Mazed, an onion and garlic importer from Shyambazar, told The Business Standard, "At present, the import tax on each kilogram of onions is around Tk8. With a 50% reduction in import tax, the price per kilogram could potentially decrease by Tk4."

Data from the Trading Corporation of Bangladesh (TCB), under the commerce ministry, shows that onions were being sold in Dhaka's metropolitan markets for up to Tk120 per kilogramme today. 

So, a Tk4 reduction would be a relatively insignificant amount.

Md Jahangir Alam, secretary of the Shyambazar Potato Wholesalers Association, also believes that despite a 13% reduction in the import tariff on potatoes, the price per kilogram of imported potatoes is likely to decrease by only around Tk4 to Tk5.

He told The Business Standard, "Currently, potatoes are not being imported. We've learned that the retail price of Indian potatoes is not significantly lower than the Bangladeshi ones, which is currently over Tk40. Therefore, if importers don't see a profit despite the tariff reduction, the likelihood of importing potatoes remains low."

According to TCB data, the price of potatoes in the local market yesterday was as high as Tk60.

The recent floods have extensively inundated 11 districts of the country, causing significant damage to agricultural produce and poultry industries. More than 6 lakh people still remain in waterlogged conditions, and as floodwaters have not fully receded in all areas, supply disruptions of various products persist.

In response to the situation, in a recent letter, the commerce ministry had requested the NBR to withdraw import duties on onion, potato and eggs in a bid to keep the price of goods stable in the market amid production disruption.

However, NBR has not withdrawn or reduced duty on egg import, as of yet.