Oranges sold for Tk 190 a kg at wholesale markets cost Tk 350 at retail shops

The largest wholesale fruit market in the capital is located in Badamtali-Babubazar in Old Dhaka. Last Saturday and Sunday, one kilogram of oranges imported from South Africa was sold there for Tk 185 to Tk 190.

After leaving Badamtali, visits to fruit shops in Hatirpool, Gulshan, Mohakhali and Karwan Bazar in Dhaka on those two days found that the same oranges were being sold for Tk 320 to Tk 350 a kilogram. This means the retail price was Tk 135 to Tk 160 higher per kilogram than the wholesale price.

The disparity is not limited to oranges. An analysis of wholesale and retail prices for five types of imported fruit—apples, oranges, grapes, sweet oranges and pomegranates—found that retail prices are 48 per cent higher than wholesale prices.

Amid high fruit prices in the domestic market, the Bangladesh Trade and Tariff Commission (BTTC) submitted a report to the Ministry of Commerce on 27 October. It noted that Bangladesh imposes higher duties and taxes on fruit imports than India, Pakistan, Sri Lanka and Nepal. The rate is around 122 per cent. Fruit is treated as a luxury item, and high duties and taxes are imposed on it.

The commission’s report also highlighted the gap between wholesale and retail fruit prices. It found that one kilogram of oranges costs Tk 275 at wholesale and Tk 370–400 at retail.

On the one hand, high import duties and taxes; on the other, declining supply and competition in the market have put fruit beyond the reach of low-income people. Yet eating fruit regularly is essential for good nutrition. Domestic fruits are available in the market, but they are not sufficient to meet demand.

Children also like fruits such as apples, oranges and tangerines. Many elderly people, meanwhile, cannot eat certain fruits because of physical ailments and have to stick to specific varieties.

With dengue cases on the rise, demand for oranges and similar citrus fruits remains high for much of the year. Domestic fruits are not available as alternatives during that period.

On 21 September, Prothom Alo published a report on fruit prices titled, ‘An Orange Now Costs Tk 100, a Coconut Tk 150–220’. Following its publication, the Ministry of Commerce held several meetings with fruit traders. Ministry sources say the government is considering reducing duties and taxes to bring down fruit prices.

Analysts say that reducing duties and taxes alone will not be enough. Competition in the market must also be increased, and measures must be taken to ensure that consumers benefit from any reduction in duties and taxes.

Why are retail prices higher?

A visit to Badamtali last Sunday found many retail fruit sellers from across Dhaka gathered there to buy fruit. Fruit is also transported from Badamtali to various districts.

The average wholesale price of the five fruits—apples, oranges, grapes, sweet oranges and pomegranates—was Tk 298 per kg. In the retail market, the average price was Tk 441. This means retail prices were, on average, 48.24 per cent higher than wholesale prices.

Retail sellers claim that after buying fruit from wholesale outlets in Badamtali, they add five types of expenses before setting their prices. After buying a 20-kilogram carton of fruit, they sometimes find that the actual weight is lower than stated. They also have to pay a commission of Tk 20 for each carton. In addition, there are transport costs and shop rents. Street vendors also have to pay extortion money.

Asgar Hossain, a retail fruit seller in Hatirpool, told Prothom Alo, “Sometimes fruits rot and has to be thrown away. We also buy fruit from wholesale markets in cartons labelled as containing 20 or 10 kilograms. But we find that the cartons do not contain that much fruit. There is always a shortfall of one or two kilograms. All these factors make retail prices somewhat higher.”

More retail shops, less competition

Fruit shops have sprung up at almost every major intersection in the capital. There are also mobile fruit stalls. People familiar with the market believe the large number of fruit shops is due to the profitability of the business.

Although there are many fruit sellers, they do not lower their prices. Even after extensive bargaining, customers can often get only Tk 10 knocked off the price per kilogram. It is common to find that all the fruit sellers in a market quote more or less the same prices. There have even been instances of other sellers turning against someone who offers fruit at a lower price.

Market insiders also say that if a list of daily wholesale prices were displayed at prominent locations in fruit markets, excessive profits by retail sellers could be questioned. The Department of Agricultural Marketing could take the initiative.

Nazim Uddin, a member of the Bangladesh Fresh Fruits Importers Association, told Prothom Alo that retail sellers try to make higher profits on smaller quantities of goods. In such cases, they need to earn Tk 80 to Tk 100 per kilogram in profit.

He said the public’s lack of access to information about wholesale and retail prices was also a problem. “It would be good if a monitoring system could be introduced to inform people every day about wholesale and retail prices in the market,” he said.

Nazim Uddin added that if an effective system were introduced to make daily market prices available to the public, it would be possible to stop retailers from charging excessive prices.