The increase in duty on fruits imported in Bangladesh from January 9 2025, have resulted in price increases ranging between $0.28 up to $0.94 per kilo. According to the Bangladesh Fresh Fruits Importers Association (BFFIA) reports a cut in the issue of letters of credit (LCs) for imports of fruit in response to the increase in customs duties.
Nuruddin Ahmed Secretary of BFFIA Nuruddin Ahmed, Secretary of BFFIA, said that wholesale and retail prices for imported fruits have risen dramatically because of the increased duties set on importers by the National Board of Revenue (NBR). Importers worry about the possibility that this price increase could decrease demand from consumers. Ahmed said that should the government cut import duties, then the issue of LCs may increase.
“The amount of LCs which are open for imports of fruits is down by 30 per percentage since the tax increase that was announced on January 9, which led to the reduction of fresh fruit in the wholesale market,” Ahmed said. Conversations with Bangladesh Trade and Tariff Commission (BTTC) are ongoing in support of the removal of duties that regulate imported fruit ahead of Ramadan. BFFIA is also calling for reductions in VAT and advance income tax (AIT) for fruits as they are as perishable agricultural products. After these calls, BTTC recommended to the NBR the reduction of duty on imports of fruit.
Dr. Moinul Khan, Chairman of BTTC Dr. Moinul Khan, Chairman of BTTC, said that the commission has been striving to ensure that the most basic consumer items remain reasonably priced. “We already have suggested that the NBR cut VAT and reduce import taxes on fruits and vegetables in order to make them affordable for of the consumer throughout Ramadan,” he said.
The market research shows that oranges are sold at $3.11 up to $3.58 per kg. In comparison, malta costs $2.83 per kilogram. Green apples cost $4.43 per kilo, Chinese Fuji apples at $3.30 to $3.58 per kilogram and pomegranates for $4.24 or $5.94 per kilogram. The increase in prices has had an impact on locally grown fruits including Thai papaya selling at $1.42 per kilogram and Guava, which ranges from $0.85 up to $0.94 per kilogram.
Based on NBR information, Bangladesh imported 102.4 million tonnes of grapes, apples citrus, pears and grapes between the months of October and January in the fiscal period 2024-25. Customs duties for imported fruit have been steadily increasing to the present rate of 136.20 percent. The import statistics of Chittagong Port reveal a decline from 822 million tonnes in FY2021-22 and 589 million kilograms in FY2023-24.
Wholesalers have reported dwindling production of fruits and declining sales. There is a noticeable decline in the demand of consumers because of higher tax rates and duties. Rafiq Sarder Wholesale trader noticed a sharp decrease in sales for wholesalers as daily sales fell between $47,170 and $9,434.
Source: UNB