Gold imports are stuck
Ordinary consumers have to buy gold ornaments with at least two and a half thousand rupees more as they are not imported legally.
After getting dealer license, the two companies legally imported about 25,000 grams or 2,143 ounces of gold. Then in the last three months no new company has been able to import gold.
At present, the price of a good quality 22 carat gold ornament per gram (11.84 grams) in the country's market is 7,341 rupees.
The country has an annual demand of 20-40 metric tons of gold. Of this, 10 per cent old gold ornaments were collected by melting. The remaining 90 percent of the demand for gold comes through baggage rules for so long.
After getting dealer license, the two companies legally imported about 25,000 grams or 2,143 ounces of gold. Then in the last three months no company has been able to import gold anew. Six companies have applied for no-objection letter for import. However, Bangladesh Bank is taking time to give permission.
Ordinary consumers have to buy gold ornaments with at least two and a half thousand rupees more as they are not imported legally. The purpose for which the dealer license was issued for import is not succeeding. The initiative to make the jewelery business completely transparent across the country is also stuck in it.
Jewelery traders complained that the price of gold in the country's market has risen sharply due to instability in the international market. On the other hand, the central bank is delaying the import of gold on various pretexts. If sufficiently imported legally, the price of gold per gram was likely to be at least two and a half thousand less than at present.
At present, the price of a good quality 22 carat gold ornament per gram (11.64 grams) in the country's market is Tk 8,341. On August 8, the price of gold per ounce (31.10346 grams) in the international market exceeded হাজার 2,060. Then the price of each bhari went up to 7 thousand 216 rupees. That was the highest price in the history of the country. After two and a half months, the current price at which gold is being sold is also the third highest.
The country has an annual demand of 20-40 metric tons of gold. Of this, 10 per cent old gold ornaments were collected by melting. The remaining 90 percent of the demand for gold comes through baggage rules for so long. That situation has not changed even after issuing dealer licenses for legal imports. Unexpected baggage rules have suddenly increased gold arrivals. In the first 15 days of this month, the expatriates brought about 950 gold bars through Dhaka and Chittagong International Airports.
As it is not imported legally, the price of gold in the country is always 3-4 thousand rupees more than the international market. That is why the expatriates brought gold bars for a small profit.
Dewan Aminul Islam, former general secretary of Bangladesh Jewelers Association, said in the first light that the price of gold in the country is always 3-4 thousand rupees more than the international market because it is not imported legally. That is why the expatriates brought gold bars for a small profit. However, the industry will not be able to move forward by relying on them. There will be no transparency. So it is necessary to make it easier to import gold legally. If that happens, the smuggling of gold will stop a lot.
Coronavirus effects, tensions between the United States and China, global stock market volatility, weakening US dollar exchange rates in international currencies and political uncertainty in the Middle East have prompted investors to buy gold as a "safe haven." Thus, as the demand is increasing, so is the price of gold and silver.
Of course, when prices rise abroad, it is not just prices that rise in the country. The Jewelers' Association also increased the price of gold in the country on another pretext. Gold flow through the baggage rules was stopped due to the closure of passenger flights on international routes due to the corona lockdown. Then the prices continue to rise in the world market. Showing these two reasons, the association increased the price of gold by Tk 5,625 on June 23. At present, they have not reduced the price even though a huge amount of gold has come through baggage rules. On the contrary, last Thursday the filling has been increased by Tk 2,333.
In the commodity exchange market, the price of pure or 24 carat gold per ounce was ৯ 1,901 yesterday. That means ২ 812 ভ 8 cents per ounce. In local currency it stands at 60,595 rupees (per dollar = 60 rupees). The 24 carat gold bar contains 99.99 percent pure gold. And 91.60 percent in 22 carats. As such, the price of 22 carat gold in the international market will be 55,505 rupees per ounce. However, gold is being sold at a much higher price in the country.
When asked, Enamul Haque, president of the Jewelers' Association, said it was possible to reduce the price of gold by Tk 2,500 overnight if enough was imported legally.
The traders did not import gold for six months even after getting the license due to high tariff. 20 percent tax was withdrawn in the budget of the current financial year. At present, a supplementary duty of Tk 2,000 has to be paid for every ounce of gold imported. The same charges apply to baggage rules.
Legal imports virtually stopped
Shafat Ahmed, son of Dildar Ahmed, owner of Apon Jewelers, was arrested in 2016 for allegedly raping two female students at the Raintree Hotel in Banani. Later, the customs detectives raided five outlets of Apon Jewelers to find the illegal assets of Dildar Ahmed. Detectives seized 13 and a half ounces of gold ornaments and 428 grams of diamonds and handed them over to Bangladesh Bank. After that the issue of gold policy came up for discussion. The Ministry of Commerce finalized the policy in November next year. Then in November last year, Bangladesh Bank licensed 18 companies, including a commercial bank. Later another institution got the license.
The traders did not import gold for six months even after getting the license due to high tariff. 20 percent tax was withdrawn in the budget of the current financial year. At present, a supplementary duty of Tk 2,000 has to be paid for every ounce of gold imported. The same charges apply to baggage rules. On June 10, after the tariff reduction, Diamond World applied to import 11,000 grams of gold. Bangladesh Bank also gave no objection in a short time. The company imported gold bars from Dubai on June 30. Later, Arosa Gold Corporation imported 15,000 grams of gold.
Immediately after the first invoice was brought, Diamond World applied through Dhaka Bank for the import of 20,000 grams or 1,614 ounces of gold. 20 days after that application, Bangladesh Bank wants to know what kind of measures have been taken before and after shipping to check the quality of imported gold and what steps have been taken to ensure security. Diamond World responded to Sesab but did not object.
The gold import process is being delayed in many ways. One thing at a time is being asked to know. According to the gold policy, Bangladesh Bank did not allow the application within 15 days
Meanwhile, on August 3, Bangladesh Bank sent a letter to the Ministry of Commerce seeking its opinion on the correct method and process for verifying the quality of the product after arriving at the supplier's end and in the country before shipping. Until yesterday, the Ministry of Commerce did not finalize that opinion.
Diamond World Managing Director Dilip Kumar Agarwala told Prothom Alo that the gold import process is being delayed in various ways. One thing at a time is being asked. According to the gold policy, Bangladesh Bank did not allow the application within 15 days.
According to Bangladesh Bank sources, besides Diamond World, Jewelery House, Ratna Gold Corner, Jaroa House, Riya Jewelers and BDEX Gold and Diamond have applied for gold imports.
When asked, Sirajul Islam, executive director and spokesperson of Bangladesh Bank, told Prothom Alo yesterday, "Two companies have already been allowed to import gold." But it is not possible to check the quality of gold at the import stage. A letter has been sent to the Ministry of Commerce to know how the verification process will be done. We will allow new imports only if they give their opinion. '
A large part of the demand for gold is collected by the expatriate Bangladeshi nationals by melting gold bars and old ornaments under the baggage rules. In that case traders cannot show any documents of their stocked gold. This opaque process in the jewelry business has been discussed and criticized for a long time. The traders feel that the jewelery business has remained where it was due to the delay in importing legally.
