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Green-chilli prices continue to exhibit volatility as importers hesitate to bring in the produce due to rising costs in neighbouring India and high customs duties, according to insiders.
They also alleged that some importers are resorting to under-invoicing to evade higher import duties.
As of Monday, the retail price of green chillies remained as high as Tk 300-450 per kilogram in Dhaka and other regions of the country. Just a week ago, the price skyrocketed to Tk 800-1000 per kilogram, as reported by the Department of Agricultural Marketing.
Value chain experts attributed the soaring prices of green chillies to a significant decline in local production, coupled with lower imports and price manipulation by traders.
Moksedul Sarker, the proprietor of Ovi Traders in Rajshahi, told the FE that he brought in seven tonnes of green chilli through Sonamashjid port in the last week of June. Interestingly, he incurred losses of Tk 30-32 per kilogram.
He did not disclose the import costs in Taka, as he mentioned that his declaration to the customs authority was US $500 per tonne.
While Mr Sarker had permission to import over 500 tonnes, he only managed to open Letters of Credit (L/Cs) for 22 tonnes and brought in seven tonnes.
Requesting anonymity, a C&F agent based in Chapainawabganj's Shibganj told the FE that importers would need a minimum of Tk 177 per kilogram or above $1,500 per tonne to import chilli from India now.
He said the customs valuation for chillis this year is a maximum of US $500 per tonne.
If an importer declares the actual amount of $1,500 per tonne, they would have to pay a minimum of Tk 90 in customs duty per kilogram, he added.
He commented that most importers are opening Letters of Credit (L/Cs) with a price declaration of $500 per tonne, while the remaining amount is being paid through the illegal and unofficial money transaction channel 'hundi'.
Nayon Hossain, a C&F agent in the Rajshahi region, told the FE that the government should set a lower duty for importing chillis, similar to what is done for onions.
He pointed out that onion importers declare an import cost of $330 per tonne and pay Tk 5.0 per kilogram.
Muhammad Liakat Hossain Khan, deputy director at the Plant Quarantine Wing, told the FE that 151 companies obtained import permits (IP) for over 52,280 tonnes of green chilli in the last fifteen days.
However, they could only bring in 671 tonnes, which accounts for only 1.27 per cent of the permitted quantity.
He added that while the IP process for importers has been made easier this year, the results have not been satisfactory.
Data from the Department of Agricultural Extension (DAE) shows that farmers have been able to harvest 10,563 tonnes of green chilli so far this summer.
Value chain expert Prof Dr Rashidul Hasan said chilli production during this summer season has notably declined due to the drought in April-May and heavy rain in June.
He said the summer production of chilli is insufficient to meet the local demand, which stands at a minimum of 1,200 tonnes per day while availability remains below 250 tonnes.
Mr Hasan further suggested that the government should temporarily remove all taxes on chilli imports, which could encourage importers to bring in larger volumes of the spice.
According to the Bangladesh Bureau of Statistics (BBS), the country produced 0.624 million tonnes of chilli last year, with only 0.128 million tonnes produced during the summer season, which spans from mid-March to mid-October.
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