The holy month of Ramadan is less than a couple of months away. Usually, prices of most essentials go up ahead of this holy occasion and consumers are also familiar with the high profit-earning motive of traders. Price has been an issue, but not the supply of goods including the ones consumed especially during Ramadan days.
This year, the situation might be different. Both prices and availability of some daily essentials and Ramadan items are likely to create more problems for the consumers. And a few symptoms are already visible.
Take the case of sugar. The demand for this sweetener goes up manifold during Ramadan. The prices of this item have skyrocketed and gone beyond the reach of most consumers. It has become scarce also. One kilogramme of packaged sugar is now being sold at Tk 130 at the retail level. It used to cost between Tk 60 and 65 a year back. As if to make the situation even more volatile, the Association of Sugar Refiners has proposed to the government to raise the price by Tk 12 per kg, citing reasons of dollar crunch and hike in gas tariffs and international prices of the item.
The scarcity of greenback and the consequent failure of the banks to open letters of credit (LCs) are now posing a serious threat to the price stability in the market. Importers, particularly the smaller ones, are finding it hard to open their LCs. As banks are refusing to open LCs, a few importers have allegedly resorted to irregular yet expensive ways of financing their imports.
One can realise the gravity of the situation from the news reports about the non-berthing of half a dozen ships carrying essential items at the Chittagong Port as the importers concerned are failing to make payments to the shipping lines in foreign exchange. The importers are now counting a huge amount of demurrage charges per day due to the delay. These ships will finally berth at the port and discharge goods. But the additional cost on account of the delay would be passed on to the consumers, as a matter of practice.
Even the Ministry of Commerce (MoC) has become worried about the overall situation involving the import of essentials the prices of which have already gone through the roof. The ministry has written to the central bank to arrange the opening of LCs for essential goods in sufficient numbers. Despite assurances from the Bangladesh Bank, the situation instead of improving has deteriorated, as few importers have reportedly been able to open LCs during the current month.
Small-scale importers at the country's largest trading hub of essential commodities at Khatunganj in Chattogram have complained about their failure to open LCs. They have expressed the fear that large importers being favoured by the banks would control the market during the upcoming Ramadan and make the consumers pay through their noses.
The BB governor, however, has assured a DCCI delegation early this week of easing the current situation with LC opening within the next 'couple of months'. The time the governor has mentioned appears to be a bit long under the prevailing circumstances. Import LCs need to be opened now if the goods are to arrive before Ramadan.
So, the government must arrange dollars in sufficient volumes for the import of essential commodities if it wants to avoid any further deterioration in the price situation. Offering higher incentives to exporters and remittance earners for early repatriation of their earnings could be a way to solve the problem.