Fresh fruit imports decline in first half of current fiscal year

Bangladesh's import of fresh fruits declined in the first six months of the current fiscal year, reflecting a slowdown in demand after import costs increased due to the devaluation of the taka against the US dollar and high import duties.

Amid this situation, the Bangladesh Trade and Tariff Commission (BTTC) has recommended reducing the duties and taxes imposed on fresh fruits such as apples, oranges, grapes, pomegranates and pears to reduce prices and make them more affordable.

As the country was facing a shortage of foreign currencies, the authorities were prompted to discourage the import of non-essentials to curb import bills and overcome the challenges.

As such, the country imported fresh fruits worth $128.51 million in the first half of the fiscal year, the lowest in three years.

Additionally, Bangladesh Bank data showed that opening of letters of credit (LC) for fruit imports declined 3.29 percent year-on-year to $140.5 million in the July-December period of FY25.

The BTTC believes that the increase in the dollar exchange rate and higher duties and taxes have significantly raised the prices of imported fresh fruits, placing an unbearable burden on consumers.

The commission said an importer must pay Tk 120 in taxes to import fruits worth Tk 86.

It stated that high tariffs would reduce legal imports while increasing smuggling through illegal channels and warned that traders may resort to excessive use of preservatives.

It added that a decline in imports would not only harm consumers but also reduce government revenue.

On February 17, the BTTC sent a letter regarding this matter to NBR Chairman Abdur Rahman Khan, mentioning that once imported, fresh fruits undergo minimal processing or value addition.

Therefore, imposing an advance tax, including a 5 percent advance VAT at the local level, is inappropriate.

It added that this measure was forcing traders to apply for refunds, leading to delays in approvals and financial strain. As a food product, fresh fruit could be exempted from such taxes.

Recently, the National Board of Revenue (NBR) increased the supplementary duty on fresh fruit imports from 20 percent to 30 percent, according to a BTTC document. The commission has now proposed reverting it to the previous rate.

Additionally, the BTTC has recommended reducing the advance tax on fresh fruit imports from 10 percent to 2 percent and rationalising the 20 percent regulatory duty.

In FY24, apple imports dropped 51 percent, orange imports 70 percent, and grape imports 29 percent year-on-year.

Moreover, due to the increase in supplementary duty in January, imports of mandarins fell 51 percent, grapes 21 percent, apples 3.5 percent, pears 45 percent, and pomegranates and dragon fruit 32 percent year-on-year.

According to the NBR's data, Bangladesh spent $300 million on foreign fruit imports in FY24. Considering the exchange rate of Tk 117 per US dollar, this amounts to approximately Tk 3,500 crore. Including shipping, insurance, and other costs, the total expenditure rises to Tk 4,664 crore. On this import, the government collected Tk 5,139 crore in revenue.