Fresh fruit imports fall 50% in four months on tightened rules

Imports of fresh fruits dropped 50% in the four months till August with the government tightening rules regarding the procurement of such non-essential items to ease pressure on depleting forex reserves.

The National Board of Revenue raised the regulatory duty on imports of various fresh fruits to 20% from the earlier 3%, while the Bangladesh Bank slapped a 100% cash margin requirement for opening letters of credit for imports of such products. 

As of April this year, fruit imports through Chattogram port were around 70,000 tonnes on average. In the wake of such restrictions, imports came down to 35,000 tonnes in the span of a month. The falling trend continued in the next two months and slumped to 21,571 tonnes in July, according to Chattogram customs.   

In August, fruit imports marked a 55% month-on-month rise to 33,454 tonnes, but the quantity still remained way lower than that in April. 

Businesses say the overall import duty on fresh fruits has now increased to 113% from a little over 89% because of the 20% regulatory duty imposed by the government in May this year.

Besides, they now have to make a full deposit before opening LCs for fresh fruit imports. Earlier, the margin ranged between 10% and 20%, they note.

That is why small and medium entrepreneurs have now stopped fruit imports as they are unable to maintain such a high cash margin.

Bangladesh imports various fresh fruits, such as apples, oranges, mandarin, grapes and pears mainly from China, Australia, South Africa, Brazil, Argentina, New Zealand, Afghanistan and France.

Importer Zinnat Ali, owner of JM Trading, told The Business Standard, "I would import fruits worth Tk2 crore per month by making a 20% deposit against LC opening. But the 100% cash margin has made it impossible for small importers like me to continue with the imports."

A drastic fall in fruit imports has affected retail sales. Billal Hossain, a retail fruit trader in Chattogram city's Baluchara market, said prices of imported fruits have increased between Tk100 and Tk150 per kg in the last few months. At the consumer level, fruit sales have fallen by more than half.

In the span of five months, apple prices have shot up to Tk250 per kg from Tk180, malta to Tk220 per kg from Tk160 per kg, orange to Tk250 per kg from Tk200, grapes to Tk500 per kg from Tk300, he noted.

Jonaidul Haque, a fruit importer, said, "We used to import fruits worth Tk30 crore on average every month. We are now facing financial losses as our imports have dropped drastically in recent months."

Touhidul Alam, general secretary of Falmondi fruit market traders' association in Chattogram, said in normal times, Tk27 crore worth of fruits was sold in Chattogram per day, but sales have now halved.