Increased food imports help to keep commodity prices stable in Ramadan

A substantial increase in the import of essential food grains and consumer goods has played a key role in maintaining the stability of prices for most necessities during the holy month of Ramadan, offering a welcome respite for consumers facing persistent inflationary pressures.

During the July-January period of the ongoing 2024-25 fiscal year, imports of food grains and consumer goods registered an increase by 17.48% and 9.5% respectively, according to Major Economic Indicators: Monthly Update of Bangladesh Bank.

This sharp upward move, especially in imports of intermediate goods, highlights a rejuvenation of economic activities across key industries during the comparative timeframe.
Historically, the approach of Ramadan in Bangladesh has often been accompanied by a sharp hike in the prices of essential commodities such as edible oil, sugar, lentils, chickpeas and dates.
However, this rise in imports has contributed to bolstering the supply chain this year, preventing significant price hikes in the key commodities.
Market analysts and government officials attribute the price stability to proactive import policies and timely measures taken to ensure adequate stock levels before Ramadan.
"The increase in food imports has played a crucial role in maintaining price stability during this critical time when demand is at its peak," said agro-economist and researcher Dr Jahangir Alam.

"The majority of the essential commodities are imported. The government took different timely measures, including cutting duties and easing smooth LC opening, to ensure adequate supply and control prices of essentials during Ramadan," he said.

The food grain imports increased by 17.48% in the first seven months of the current fiscal year compared to the corresponding period last year, according to the latest central bank data.
Of the total food grains, wheat import fell by 0.16% while rice import increased by 1,350.48%, according to the BB report.
The country imported rice worth US$182.76 million in the first seven months of the current fiscal year against $12.60 million during the same period last year.
Consumer goods saw a 9.15 % year-on-year increase in imports, according to the data.

Of the total consumer goods, edible oil imports increased by 11.35% and sugar saw a decline by 29.95% during the period.
Traders and retailers also acknowledge the impact of increased imports on market dynamics. "Unlike previous years, we have not seen drastic spikes in prices for staple food items. The government's efforts to facilitate smoother imports and reduce supply chain disruptions have helped keep prices under control," said Md Polash of Matlab Traders at Mirpur-13.

Despite the overall stability, minor fluctuations in prices have been observed in some essentials, including rice and edible oil. However, experts believe that continued monitoring and strategic import management will further enhance market stability throughout Ramadan.

Consumers, especially those with lower income, have expressed cautious optimism over the relatively stable prices this year.
"In previous years, the prices of essentials would skyrocket just before Ramadan. This year, things seem more manageable, and we hope they remain so," said Sazedur Rahman, a shopper at a local grocery store.

Earlier on 11 November 2024, the central bank allowed delayed payment of bills for importing 11 essential food items ahead of the holy month of Ramadan. The products are rice, wheat, onion, pulses, edible oil, sugar, eggs, chickpeas, peas, spices and dates.

It said the decision was taken to facilitate transactions in the case of imports and the facility will be applicable till 31 March 2025.
On 6 November, the central bank issued a notification relaxing the previous 100% margin or security value for importing goods. Now that margin will be determined on the basis of the customer-bank relationship.