Chittagong Bureau: After edible oil, the prices of different types of spices are rising in the wholesale market of Chittagong, which is affecting the retail.
In Chittagong’s Khatunganj, one of the country’s largest wholesale markets, prices of spices like cardamom, cinnamon, cloves, and cumin have risen by 3 to 20 percent in a week.
This has also affected the retail market. The price of these spices has increased from 5 to 33 percent in the neighborhood shops.
Traders cited falling dollar against the dollar, delays in shipping, rising container fares, and the need to preserve cash margin rates for opening import bonds (LCs) as reasons for the rise in prices.
They say that even if there is ‘enough’ import, it will have an effect on the EID spice market after a month and a half.
Cardamom prices have risen the most in Khatunganj. According to traders, the wholesale price of cardamom is now TK 1,460 per kg, up from TK 1,280 a week ago. As a result, the price has increased by 180 rupees per kg in a week.
Cumin is being sold at a wholesale price of TK 394 per kg, up from TK 385 to TK 387 last week.
Clove, which was sold at TK 950 to TK 1,000 last week, is now TK 1,050 per kg. The price of cinnamon, which was sold at TK 285 to TK 360 per kg, has also increased from TK 8 to TK 10 per kg to TK 305 to Rs 377 per kg.
According to wholesalers, the spices are mainly imported from India, Afghanistan, Guatemala, Madagascar, Syria, Sri Lanka, Indonesia, China, Vietnam, Iran, and Turkey.
Meanwhile, spices come from India by road. And are brought from other countries by ship.
Traders say that even a month ago, LCs were opened at 86 to 87 rupees per dollar, now it has to be opened at 96 takas.
Abdur Razzak, the owner of Gulistan Traders, a spice importer in Khatunganj, said, “The spice market is a bit more now. The value of the dollar is rising step by step. Moreover, due to the rising prices of products in the international market, the purchase price is also falling. ”
He said that the market for spices was declining during Eid-ul-Fitr. Now the central bank has redefined the LC margin rate. We have to open our LC with more money than before in dollars. Traders are also facing losses in paying the remaining amount after the goods arrive. ”
Importer Abdur Razzak hinted that the price of spices would go up further.
The shopkeepers of Reyazuddin Bazar in Chittagong said that the prices of various spices have also gone up in the retail market due to the rise in prices in the wholesale market.
According to them, the market price of spices depends on the wholesalers of Khatunganj. If prices rise there, retail prices naturally rise.
Ran Das, a spice seller in the market, said, “The price of spices has been stable for some time. However, after Eid-ul-Fitr, prices are on the rise. ”
Cumin was sold at TK 420 per kg in Reyazuddin Bazar on Thursday. A week ago, the price was 390 to 400 takas.
Cardamom was sold at TK 1,800, which was TK 1,350 to TK 1,400 during Ramadan. A couple of weeks ago, cloves were sold for TK 1,100, but now they are being sold for more than TK 100.
Cinnamon has been sold at TK 380 to TK 400 per kg, which was also sold at TK 360 a couple of weeks ago.
Ambiguity with LC margin
Amar Kanti Das, senior vice-president of the Chittagong Spice Importers’ Association, claimed that LCs for various types of spices used to be opened at a margin of 10 to 25 percent, but now LCs are not being opened below 50 percent margin.
“I have talked to a few banks. They said that in the case of all kinds of spices, LC should be opened at a 50 percent margin. ”
To overcome the dollar crisis, the central bank May 10 announced an increase in cash margin rates to open LCs (bonds) of various products to curb imports.
It says a minimum of 75 percent cash margin is required to open debentures on imports of motor vehicles such as sedans, cars, or SUVs and electric and electronics home appliances.
It also directed to maintain a minimum of 50 percent cash margin for opening debentures against imports of all other commodities except some urgent and specific sector products.
Imported for use in medical products including baby food, essential food products, energy, life-saving medicines, and equipment approved by the Department of Health, directly imported capital machinery and raw materials for production-oriented local and export-oriented industries, agricultural sector-related products, and government priority products are.
The instructions of Bangladesh Bank did not specify what the margin would be in the case of spices. Amar Das claims that the banks are keeping a margin of 50 percent from them.
“Spices are a less common product. It takes a long time to import and sell one container of spices. But when prices rise, buyers reduce the amount they buy. If the goods are not released on time, extra money has to be paid at the port. These have an impact on the market. ”
However, talking to the bankers, his demand was not fully matched.
Faruk Ahmed, Manager, Khatunganj Branch, Bank Asia, said: So we are opening LC at the previous rate for the most used spices like cumin and cinnamon. And for those spices that are not always necessary, LC has to be done with a margin at the rate of 50 percent fixed by the government. ”
However, the matter is not following any specific rules, it was understood in the words of an official of another bank in Chittagong.
Asked not to be named, he said, “There is ambiguity in the central bank’s circular. There is no mention of what kind of product will be considered a daily necessity. Therefore, banks have to rely on the decision of their head office to open an LC. The customer-bank relationship is also a factor here. ”
