Business Report :
The Ministry of Commerce has asked the National Board of Revenue to withdraw import duties on onion, potato and eggs in a bid to keep the goods’ prices stable in the market amid production disruption due to the ongoing flood situation.
In a letter to the revenue board, the ministry recently wrote that the prices of potatoes and onions in Dhaka’s markets have remained high for several months.
“We have asked the NBR to reduce the duties imposed on the three goods. They are working to this end. Hopefully, a decision on this will come soon,” Md Selim Uddin, commerce secretary says on Sunday.
According to government data, potatoes are currently being sold at Tk 60 per kilogram, a 29 per cent increase compared to the same period last year. Onions are even more expensive, costing at least Tk120 per kilogram, which represents a 31.43 per cent rise from last year.
Meanwhile, the recent floods have disrupted egg supply, leading to price increases in flood-affected districts. A dozen eggs, previously priced between Tk155 and Tk160, have risen to Tk170 in these areas, raising concerns about price hikes in other parts of the country.
In response to this situation, the Ministry of Commerce is advocating for the opening of imports for eggs, onions, and potatoes.
Simultaneously, they are proposing the removal of existing import duties to facilitate the importation of lower-cost products and stabilise the domestic market. The commerce ministry data shows that while approximately 6-7 lakh tonnes of onions are imported annually, eggs and potatoes are typically not imported without special permission.
Government data states that the country’s annual demand for onions and potatoes is estimated at 28 lakh tonnes and 90 lakh tonnes, respectively.
Daily egg production in Bangladesh is around 4 crore pieces, according to the commerce ministry.
However, the recent floods have severely impacted egg and chicken production infrastructure in 11 districts, resulting in the destruction of facilities and the loss of many chickens, according to the Ministry of Fisheries and Livestock.
Currently, onion imports are subject to a 5 per cent customs duty and a 5 per cent regulatory duty. Imports of eggs and potatoes face a 25 per cent customs duty, a 3 per cent regulatory duty, and a 5 per cent AIT (Advance Income Tax).
The complete withdrawal of these duties could reduce prices in the domestic market and encourage imports.
The Ministry of Commerce believes that the withdrawal of duty would also contribute to lowering inflation.
Recent floods have extensively inundated 11 districts of the country, causing significant damage to agricultural produce and poultry industries. As the water has not fully receded in all areas, and more than 6 lakh people remain in waterlogged conditions, disruptions in the supply of various products persist.
The Bangladesh Trade and Tariff Commission has analysed the import and local production of these three products and provided insights to the Ministry of Commerce.
According to the report, the Indian government has set a minimum export price for onions at $550 and imposed an additional export duty of 40 per cent. Besides, imports are subject to a 10 per cent import duty.
According to the Ministry of Agriculture, potato production in the country is 12 lakh tonnes lower than last year, negatively impacting the market for several months. This has forced consumers to purchase potatoes at record-high prices for an extended period.
The commerce ministry stated that eggs and potatoes are conditionally importable but permission for their imports have been granted considering the ongoing situation.
Therefore, providing a duty concession facility for the import of these two products during the specified period would not negatively affect the government’s desired revenue collection.
In its latest report on flood damage, the Ministry of Agriculture and Fisheries and Livestock estimated that the damage to the fish and livestock sector exceeds Tk2,000 crore.
Additionally, the production loss of various crops, including rice, vegetables, fruits, and summer vegetables, has reached approximately 10 lakh tonnes, valued at around Tk3,500 crore.