Chaos in the Fruit Market as Import Duties Skyrocket

The fruit market in Bangladesh has plunged into turmoil following a sharp hike in import duties. 

On January 9, the National Board of Revenue (NBR) raised the supplementary duty on imported dried and fresh fruits from 30% to 45%, and increased the duty on select fresh fruits like apples, grapes, and watermelons from 20% to 30%. This has led to a significant spike in both local and imported fruit prices, while sales have dropped by nearly 50%, according to traders.

Over the past nine days, the prices of imported fruits such as apples, oranges, malta, and grapes have surged by Tk20-50 per kilogram at both wholesale and retail levels. Traders report that the cost of clearing imported fruits from ports has risen due to the new duty rates, prompting many to halt imports for fear of losses. Market insiders warn that if this trend continues, there could be a fruit shortage during Ramadan.

Consumers Association of Bangladesh (CAB) Vice President Nazer Hossain highlighted the severe impact on low-income households and patients who rely on fruits for nutrition. He noted that persistent inflation and these price hikes have made fruits unaffordable for many.

The rise in demand for local fruits, following the price surge of imported varieties, has also driven up their prices. Fruit vendor Sahidul Islam from Dhaka’s Mirpur-11 area explained that rising wholesale prices leave vendors with no choice but to increase retail prices, resulting in plummeting sales.

On January 12, at the Mirpur-11 market, prices of popular fruits were significantly higher: Fuji apples at Tk340 per kg (up from Tk280), Indian oranges at Tk280-290 per kg (up from Tk260-270), Chinese oranges at Tk350 per kg (up from Tk320), black grapes at Tk580 per kg (up from Tk500), and red grapes at Tk640 per kg (up from Tk500).

Customers and traders alike expressed concern about the availability of fruits during Ramadan. Tania Alam, a customer at Mirpur-6, stressed that fruits, now a necessity due to frequent disease outbreaks like dengue, may become unaffordable during the holy month. 

Sirajul Islam, President of the Bangladesh Fresh Fruits Importers Association, revealed that the association had requested the NBR to reduce taxes to keep fruit prices affordable, especially for Ramadan. However, the government instead increased duties, making fruits increasingly inaccessible to middle-income households. This, he added, has caused traders to scale back imports as sales decline.

The classification of foreign fruits as luxury items by the NBR in 2012 has contributed to this trend, with duties and taxes on imported fruits steadily increasing in every subsequent budget. As of May 2022, the total tax burden on imported fruits stood at 113.80%, further exacerbated by the latest hikes. The higher duties have caused the price of fruits like apples, oranges, and malta to rise by Tk16-17 per kg and grapes by Tk40-50 per kg at the wholesale level.

Bangladesh currently imports 38 types of fruits, with apples, malta, oranges, grapes, and pomegranates comprising 95% of imports. The 2023-24 fiscal year saw a decline of 10,000 tonnes in fruit imports compared to the previous year, with most fruits now sourced from China and India.