Prices of spices, dry foods soar as assessment value hiked in 5 products

The country's spice and dry foods market has skyrocketed to an extreme high as the customs authority has abruptly increased the assessment value of five products.

The assessment value (purchase price of imported goods determined by customs) of these five items – pistachio, caraway seeds, cumin, almond, and alu bukhara – was increased last Sunday.

This jump has caused a ripple effect in the market, causing prices of almost all kinds of spices and dry foods in the market to skyrocket in the last five days.

Traders are baffled by the sudden change, saying it has pushed prices to jump suddenly even when there is enough supply and no price change in the international market.

Md Lutfor Rahman, a former member of the National Board of Revenue (NBR) told The Business Standard, "It is not logical to assess import value according to the local market. It should be done on the basis of transaction value." 

Meanwhile, the customs authority says the change was brought after checking the local market, arguing that they found a huge gap between the price declared by the importers and the market price.

The new assessment valuation is also done as per existing law, they say.

The five items

According to importers and Chattogram Customs, a week ago the assessment value of pistachio was Tk165 per kg. It is now pegged at Tk1,540 with an increase of around 833%.

This means, earlier there was a total duty of Tk100 per kg of pistachio nuts, but now it stands at Tk900.

Similarly, the import price of caraway seeds per tonne was assessed at Tk55 per kg but currently, it is Tk330. As a result, the duty has jumped to Tk108 per kg from Tk18

Earlier, per tonne Almonds were assessed at Tk200 per kg, which is now Tk660 –  an increase of 330% jump. 

Before Sunday, the assessment value of alu bukhara per tonne was Tk165 per kg, but now it has been increased to Tk385 – 233% increase.

The assessment value of one kg cumin was Tk203 before Sunday, which increased by 189% to Tk385. Accordingly, import duty has increased from Tk120 Tk225.

Prices at local market

Meanwhile, wholesale prices of these items along with others have been soaring due to the increase in duty. 

Traders in Khatunganj, the largest wholesale market in Chattogram, say the prices of cumin, sweet cumin, caraway seed and black cardamom have increased the most.

For instance, the wholesale price of a kilogramme of cumin jumped from Tk400 to Tk700 within a span of a week. 

Similarly, the price of black cardamom increased by Tk700 to Tk 1,400 and caraway seed to Tk700 from Tk550.

Pistachio, cashew, wood nuts, soy seed, sweet cumin and alu Bukhara are being sold at unusual prices, surpassing all previous records.

Sikandar Hossain, owner of Ishaq Saudagar, said the wholesale price of almost every spice and dry food product has increased in the market by 50%-275% per kg in a week. 

Amar Kanti Dash, the organising secretary of the Bangladesh Garam Masala Traders Association, said it was already difficult for them to import spices because of the dollar crisis and the spices are listed as luxury goods. 

What experts say

Defending the decision, Faizur Rahman, commissioner of Chattogram Custom House, said import duty is usually determined based on the price at which the importers book or purchase the goods from the international market.

"However, if the declared price varies from the selling price and the international price, the customs authority can increase the assessment value by doing market analysis as per NBR Valuation Rules 2000," he mentioned. 

He argued the prices of these goods were already high in the local market but the importers were undervaluing them, depriving the government of a lot of revenue. 

On the contrary, Akhtar Kabir Chowdhury, president of Sachetan Nagarik Committee-TIB said this sudden hike was not the right decision. "Assessment value should be determined by analysing domestic and international markets." 

Furthermore, this provides importers the opportunity to launder money and it will protect the interests of importers and money smugglers rather than consumers, he said.

He explained, when any value is increased in Bangladesh, it is not reduced. "With this, the booking rate of the related products in the international market is reduced, but due to the additional value determined by the customs, there is an opportunity to launder money." 

SM Najer Hossain, vice president of the Consumer Association of Bangladesh (CAB), told TBS that it is not at all desirable to destabilise the market by increasing the assessment value at this point.