TDS Desk:

The country’s fruit market has once again plunged into instability following a sharp increase in import duties.

On 9 January, the National Board of Revenue (NBR) increased the supplementary duty on imports of dried and fresh fruits from 30% to 45%. The duty on some fresh fruits apples, grapes and watermelons was increased from 20% to 30%.

Consequently, both local and imported fruit prices have spiked significantly, and sales have plummeted by nearly 50% across the country, putting an immense pressure on consumers as well as businesses, said traders.

Over the past nine days, prices of imported fruits such as apples, oranges, malta, and grapes have surged by Tk20-50 per kilogram at both wholesale and retail levels, according to sources.

Traders said in May 2022, the government imposed regulatory duties along with import taxes and VAT on fruit imports. The latest duty hike has made the process of clearing imported fruits from ports costlier.

Many traders are even halting imports due to fears of losses. If this situation continues, there could be a shortage of fruits in the upcoming Ramadan season, said market insiders.

Nazer Hossain, vice president of the Consumers Association of Bangladesh (CAB) that the price hiking has severely impacted customers, particularly those who rely on fruits for their nutritional needs.

“Consumers have already been struggling with inflation hovering above 9% for nearly two years. Now, fruits have become unaffordable for many with the repeated price hikes. It will also affect patients,” he said.

Prices of local fruits also increased soon after the raised duties imposed on imported fruit, as the demand for the latter jumped, he added.

Sahidul Islam, a fruit vendor at Mirpur -11 in Dhaka, said, “When wholesale prices go up, we have no choice but to sell fruits at higher rates. But this hurts us as sales drop every time the prices rise. Many customers have stopped buying fruits altogether.”

On Friday, at Mirpur 11 market in Dhaka, Fuji apples sold at Tk340 per kg on Friday, while its price was Tk280 just a couple of days ago.

Indian oranges sold at Tk280-290 per kg, up from Tk260-270, Malta at Tk280 per kg, up from Tk260, Chinese orange at Tk350 per kg, up from Tk320, black grapes at Tk580 per kg, up from Tk500, while white grapes were priced at Tk480 per kg, up from Tk400 on that day. Red grapes saw the highest increase, selling at Tk640 per kg, up from TK500.

CONCERNS OVER AVAILABILITY OF FRUIT IN RAMADAN RISE

Tania Alam, a customer at Mirpur-6 said, “Fruits are no longer a luxury; they are a necessity, especially with frequent outbreaks of diseases like dengue. If this price trend continues, many people won’t be able to afford fruits during Ramadan, a time when they are in high demand.”

Sirajul Islam, president of the Bangladesh Fresh Fruits Importers Association, “We wrote to the NBR a month ago, requesting a tax reduction considering low-income consumers, so that fruit prices remain affordable during Ramadan.

HOWEVER, THE GOVERNMENT HAS DONE THE OPPOSITE AND RAISED PRICES.”

“People can’t afford to buy fruit due to higher import duty imposed in previous times. This hike in duty now makes fruit available only for rich men, and the middle-income group will not afford to buy it now. In this situation, traders are hesitant to import fruits as they fall the sale drastically. This will inevitably affect Ramadan,” he said.

Despite being a food product, foreign fruits were classified as luxury goods by the NBR in 2012. Since then, every budget has seen an increase in VAT and duties on imported fruits. Until May 2022, imported fruits were subject to a 25% customs duty, 15% VAT, 5% advance income tax, and 4% advance trade VAT.

“Amid a dollar crisis, in May last year, the NBR imposed an additional 20% regulatory duty on all foreign fruit imports, bringing the total import tax burden to 113.80%. Now, within two years, duties have increased by another 10-15%,” said Sirajul Islam.

“We are providing duty as per the newest rate from 9 January. The price of Apple, Orange and Malta has increased by Tk16-17 per kg at the wholesale level and Grapes by Tk40-50 per kg at the wholesale level following the duty hike,” he said.

Bangladesh imports 38 types of fruits, with 95% of the imports comprising apples, malta, oranges, grapes, and pomegranates. The remaining 5% includes pears, kinnow, wood apples, avocados, rambutans, and kiwis.

According to the NBR, foreign fruit imports in the 2023-24 fiscal year have decreased by 10,000 tonnes compared to 2022-23. Last fiscal year, total fruit imports stood at 589,000 tonnes.

Four to five years ago, Bangladesh imported 38 different fruits from 35 countries. Currently, fruits are imported from 22 countries, with the majority coming from China and India.