Beef price mystery: Why it is not same everywhere?

Dhaka's meat markets are seeing a range of prices. Some vendors are selling beef as low as Tk595, while others are charging up to Tk750 per kg. This raises questions about how some shops can offer significantly lower prices and still make a profit.

Visiting Khorsed Goshto Bitan, a meat shop in the capital's Malibagh area today, The Business Standard found that the vendor is selling beef at two different rates simultaneously: Tk750 and Tk600.

On one side of the shop, assorted beef pieces of varying sizes were hung, allowing customers to choose according to their preference, albeit at the higher price of Tk750.

On the other side, chopped meat was available for Tk600, attracting a larger number of buyers, primarily consisting of individuals from low- and middle-income brackets.

The shopkeepers told TBS that beef is being offered at Tk600, keeping in mind the affordability for low-income individuals during Ramadan. Because of the affordable price, sales were going through the roof.

They said a total of 14 cows were cut up and sold from morning until 1:30pm on Sunday. Four more cows were being prepared for slaughter, and they will be brought in once the current batch is sold off.

When asked whether the shop incurs losses by selling beef at Tk600, Jahangir Alam, overseeing the shop's operations, said, "Beef is sold at two different prices, but there is no loss involved in either. Essentially, this approach aims to attract buyers across all income brackets, from high to low."

Another meat seller in North Shahjahanpur, Khalilur Rahman, has been selling beef at Tk595 since the first day of Ramadan, the month of fasting. This vendor is selling beef worth over Tk1 crore a day only because of the low price.

However, Khalil Gosto Bitan remains closed on Sunday. Due to its closure, a nearby meat shop, Halal Meat, remained bustling even in the afternoon. Some buyers even voiced their disappointment after waiting in line for half an hour without being able to purchase meat. This shop was selling meat for Tk750.

A nearby shopkeeper told TBS, "In the morning, Halal Meat was selling beef at Tk720, but when they learned about the closure of Khalil's shop, they hiked the price to Tk750."

Traders like Khorshed and Khalilur, who are retailing beef for Tk600, do not sell beef in large pieces. Instead, they chop the meat into smaller pieces, blending bones and meat together for sale.

Khalilur Rahman, after being tracked down by TBS, said selling beef at Tk600 yields a small profit margin. However, he emphasises that the higher volume at this price point leads to increased overall profit despite the lower profit per kg.

In Dhaka, the traders who are offering beef at low prices are in the minority, but none of them have reported having losses. Their business strategy focuses on boosting profits through increased sales volume, even at reduced profit margins.

On the contrary, a majority of traders in Dhaka are selling beef at higher than the government-fixed rate.  

One such trader named Swapan from Banasree was retailing beef for Tk750. He said, "Selling beef at Tk600, after factoring in the cost of two employees per day and shop rent, is not sustainable for us because we are unable to sell more than one or two cows."

In addition to private sales, the government is offering beef at Tk600 in 25 locations and Tk650 in five locations across the capital from the first day of fasting. While the quantity available is not extensive, around 2,500 people can purchase meat from these makeshift shops daily.

The government's sales initiative has exerted some pressure on traders, albeit minimal. On the first day of Ramadan, beef was sold at Tk780 in most areas of Dhaka, but the price has since decreased to Tk750. In some places, sellers are offering it for Tk720-730.

Is Tk750 for a kg of beef justified?

On 15 March, the Department of Agriculture Marketing set the maximum retail price for 29 commodities, including beef at Tk668.39 per kg.

According to the department, the production cost of one kg of meat is Tk587.50, and factoring in a reasonable profit margin, the retail rate should not exceed Tk664.39. However, apart from a few, the majority of meat traders are not adhering to this fixed price.

Cattle traders and farmers said it is evident that raising the price of beef before any festival has become customary for meat traders. However, this practice has elevated prices to a level that exceeds the affordability of many individuals with limited incomes. Consequently, those who sell meat at relatively lower prices are getting a load of customers.

Leaders of the Bangladesh Dairy Farmers Association (BDFA), representing cattle farmers nationwide, said current beef prices are unjustified.

BDFA President Imran Hossain told TBS,  "Cattle prices at the farm level remain normal, akin to those observed in December-January when beef was priced at Tk650 in Dhaka. However, the current beef price is significantly unreasonable, exceeding acceptable levels."

He also expressed concern that traders are pushing the market beyond the purchasing power of individuals with limited incomes.

"Importers may take advantage of this situation by advocating for lower-priced meat imports, asserting that it would improve the current market situation. Nonetheless, if imports are permitted, both farmers and traders within the country's thriving livestock sector will begin to incur losses," Imran Hossain added.

Golam Mortuza, president of the Bangladesh Meat Traders Association, told TBS, "The price of beef should not be so high. Traders have become very unruly, they no longer accept the decision made by the association."

According to Section 4 of the Agricultural Marketing Act, 2018, the Department of Agricultural Marketing is responsible for setting prices for agricultural products, yet it lacks the authority to oversee the market. Monitoring duties fall under the jurisdiction of the Directorate of National Consumer Rights Protection.