Despite the interim government’s recent decision to waive duties on six essential commodities—rice, oil, sugar, onions, potatoes, and eggs—only egg prices have seen a reduction, while the cost of other items has either remained stable or increased.
Over the past two and a half months, the government has introduced these duty exemptions to alleviate pressure on consumers. However, rice, oil, and sugar prices have risen, while onion and potato prices remain steady, offering no significant relief to consumers.
Limited impact of duty exemption
Although traders acknowledge that the duty-free goods have not yet fully arrived in the market, they attribute the rising prices to various factors. Biswajit Saha, director of City Group, explained, "The goods purchased under duty exemptions are still on their way. Once they arrive, prices will decrease. However, global oil prices have increased by $100 per ton, exceeding $1,150, adding pressure."
Increased food inflation and recent untimely rains and floods have exacerbated the situation, contributing to higher prices.
Consumer frustration over market prices
Consumers, however, are frustrated by the lack of government oversight in ensuring the price reductions. Many believe that traders are taking advantage of the situation, artificially inflating prices. A buyer at the Shantinagar market, Salim Hossain, remarked, “When duties are lowered, supply should increase, and prices should fall. But we don’t see that happening. Yet, when prices go up, they rise immediately.”
Golam Rahman, former president of the Consumers Association of Bangladesh (CAB), echoed this concern: "Duty cuts alone aren't enough. Strict market monitoring is crucial to ensure that consumers benefit. Many traders have a tendency to seek excessive profits."
Rice prices continue to rise
Rice prices have been climbing since floods affected the northern region, causing a supply shortage in Dhaka markets. On October 16, the National Board of Revenue (NBR) reduced the duty on rice imports to increase supply and stabilise prices. Import duty was reduced from 25% to 15%, regulatory duty was cut from 25% to 5%, and the 5% advance tax was eliminated.
Despite these efforts, the price of rice has continued to rise. Fine rice that previously sold for Tk 72-74 is now priced at Tk 74-78 per kg, while medium rice has increased to Tk 64-70 from Tk 62-66. According to Kawsar Alam, a leader of the Rice Traders Association, “There is currently no need for private rice imports, but reducing the duty may lead to imports from India and Myanmar. However, it will take time for this to impact the market.”
Oil and sugar prices still high
Although the government has also reduced duties on oil and sugar, prices remain high. In just one week, sugar prices rose by Tk 3-4 per kg, and oil prices increased by Tk 5 per liter. The NBR announced in mid-October that duty cuts would reduce sugar import costs by Tk 11 per kg, and VAT on refined soybean and palm oil was reduced from 15% to 10%.
However, due to global price increases, local markets have yet to feel the impact. Biswajit Saha noted, “It's been only five or six days since the duty was lifted, and the international market is still driving prices up.” Currently, soybean oil is priced at Tk 153-156 per liter, and palm oil at Tk 148-151 per liter.
Egg prices drop slightly
Among the six commodities, only eggs have seen a noticeable price decrease. The government reduced the 25% import duty on eggs to 5%, leading to a price drop of Tk 13.80 per dozen. Eggs now sell for Tk 160-165 per dozen in retail markets, down from Tk 180 just a week ago.
Stable onion and potato prices
Onions and potatoes have seen no significant changes in price, despite the duty waivers. Onions remain priced between Tk 110-120 per kg, and potatoes are sold at Tk 55-60 per kg. The government had reduced the 25% import duty on potatoes to 15% in early September, but the price impact has been negligible.
Calls for greater oversight
Consumers and experts alike are calling for stricter government monitoring to ensure traders do not manipulate prices. “The government must take strong steps to ensure that duty cuts translate into lower prices for consumers,” said Golam Rahman.
Effective market monitoring and regular inspections are needed to prevent profiteering and ensure the benefits of duty exemptions reach ordinary consumers.