No logical reason for spike in coal prices
Coal prices have shot up in the domestic market since September this year even though there is no rationale behind the hike, according to a report by the commerce ministry.
The prices of coal, which is used mainly to burn bricks, rose 21 per cent to between Tk 28,000 and Tk 30,000 per tonne at the beginning of December from Tk 22,000 to Tk 24,000 per tonne in September.
It appears there is no reason for the prices to increase in the domestic market considering the import cost and exchange rate of the US dollar, the Bangladesh Trade and Tariff Commission (BTTC) said in a report obtained from the commerce ministry.
The observation comes amid brick kiln owners' complaints regarding soaring production costs. The hike in coal prices comes at a time when brick makers are having to spend more on transport and labour.
Considering the increased cost of coal, many brick makers have switched to firewood, the use of which is prohibited, according to a report by this newspaper published earlier this month.
Bangladesh mainly imports coal from Indonesia, Australia and South Africa to meet its requirement for the fuel, which is also used in garments and power plants, as per the BTTC report and an association of coal importers.
Coal prices shot up in the global market midway through this year due to the Russia-Ukraine war coupled with post-pandemic recovery.
In July, the average price of coal was $206 per tonne in the global market, the BTTC report said, adding that prices continued declining to touch $134 per tonne in October. But in November, prices rose to $150.45 per tonne.
As such, prices declined 26 per cent in November from July in terms of import cost.
The report cited the average prices per tonne of coal taking into consideration the opening of letters of credit (LCs) and said the rate has been falling since September.
"So, it seems that prices of coal will decline by the end of this month," said the BTTC, suggesting the government monitor domestic and international prices every three months.
Syed Md Atiqul Hassan, president of the Bangladesh Coal and Coke Importers Association, said prices of the fuel have dropped in the last few weeks as its demand fell after many brick kilns closed down amid high prices.
Prices are now at Tk 22,000 to Tk 23,000 per tonne, he said.
Hassan then said the local market registered increased prices owing to the higher cost of the US dollar to pay import bills and banks' unwillingness to open LCs.
"As a result, we cannot take advantage of the price fall in the international market," he added.
Private importers brought 50 lakh tonnes of coal in 2021. This year, total imports may be around 40 lakh tonnes, Hassan said.
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