Importers to incur losses if consumers spend less

Prices of commodities have skyrocketed on the global market over the past one year.

Edible oil prices have more than doubled.  Prices of all types of pulses, wheat, sugar, and gram have also gone up sharply.  

Consumers in Bangladesh also have had to take a hit as the prices of consumer goods have increased abnormally in the domestic market because of the volatility on the international market.

Even though importers and wholesalers are likely to benefit from the price hikes initially, they are at risk of incurring losses in the long run.

This is because the purchasing power of ordinary consumers has decreased because of the abnormal hikes in consumer goods prices. This has reduced the demand and sales of essentials.

Importers have imported surplus goods in anticipation of extra profit and a surge in demand during Ramadan even amid increasing booking prices on the international market. But, they will suffer big losses if the imported goods remain unsold.

Besides, prices of consumer goods have started to come down a bit on the international market. As a result, if the previously imported goods remain stockpiled and, in the meantime, goods booked at lower prices come to the market, importers will have to incur losses on the previously imported goods.

Tariq Ahmed is the director (operations and marketing) at TK Group of Industries