The price of gold in Bangladesh has surged past Tk 200,000 per bhori and is now approaching Tk 210,000 — a level unimaginable even six months ago. Gold has become more expensive than ever before, with one rati now priced at Tk 2,264.
Despite gold’s steep rise, traders say the price-setting process in Bangladesh remains far from transparent. Many in the jewellery industry blame the absence of a formal mechanism for legal gold imports as the main reason behind the lack of clarity and the high domestic price.
According to the Dubai Jewellery Group, the price of 22-carat gold in Dubai on Wednesday was 5,269 dirhams per bhori (excluding VAT and making charges), equivalent to about Tk 175,254. In contrast, data from the India Bullion and Jewellers Association shows the price of jewellery-grade gold in India was Rs 141,053 per bhori, or about Tk 196,063.
Meanwhile, the Bangladesh Jeweller’s Association (BAJUS) listed the price of 22-carat gold at Tk 217,382 per bhori (excluding VAT and making charges) on the same day. That means gold in Bangladesh was Tk 42,128 more expensive than in Dubai and Tk 21,007 higher than in India. However, as global prices dropped slightly, local gold prices were reduced by Tk 8,386 per bhori on Thursday, bringing the new rate for 22-carat gold to around Tk 209,000.
Lack of formal imports inflates prices
Bangladesh has virtually no commercial gold imports. Most gold enters the country through returning overseas passengers. Under the “Passenger (Non-Tourist) Baggage (Import) Rules, 2016”, a traveller can bring in up to 10 bhori (117 grams) of gold by paying a duty of Tk 5,000 per bhori.
Even with that duty considered, the local price remains significantly higher. It is widely suspected that a large portion of gold in the market arrives through illegal channels, while much of the demand is met by recycling old jewellery.
How prices are set
Gold prices in Bangladesh are officially set by BAJUS, but the benchmark comes from the wholesale market in Tanti Bazar, Old Dhaka, determined by the Bangladesh Poddar Association, which represents gold traders at the wholesale level.
According to several jewellers, the Poddar Association fixes the price of pure gold each afternoon around 3:00pm, based on supply from the baggage channel, old jewellery collected nationwide, and price movements in Kolkata.
The wholesale rate is then used by BAJUS’s Standing Committee on Pricing and Price Monitoring to determine the retail price. For example, on 19 October, when BAJUS raised prices, the wholesale rate was Tk 202,000 per bhori. Adding a Tk 5,000 profit margin for retailers, BAJUS set the official rate for 21-carat gold accordingly. Consumers then pay an additional 5 per cent VAT and making charges on top of that when buying jewellery.
Zainal Abedin, general secretary of the Bangladesh Poddar Association, told media “We determine prices based on the international market, local supply, and neighbouring countries’ rates.” When asked why prices are higher than abroad, he said profit margins at multiple stages — baggage importers, wholesalers, and retailers — push up the final price.
In 2018, the Ministry of Commerce introduced a Gold Policy to bring transparency to the trade. The following year, Bangladesh Bank granted import licences to 19 institutions, including one bank, allowing commercial gold imports. Some companies initially imported small consignments, but imports soon dwindled due to foreign exchange shortages, regulatory delays, and VAT complications.
Is pricing method fair?
While many countries operate ‘commodity exchanges’ for gold trading, Bangladesh does not. Such platforms allow transparent price discovery based on real-time market supply and demand. Jewellers argue that if the Bangladesh Bank managed a formal trading system, they could buy gold closer to international rates, ultimately benefiting consumers.
Dewan Aminul Islam, former general secretary of BAJUS, defended the current system as “pragmatic under existing conditions,” noting that until Bangladesh can purchase gold institutionally at global prices, jewellers cannot sell it cheaply. He added that even if prices appear high, customers can still sell their gold back at similar rates.
According to Commerce Ministry data, Bangladesh’s annual gold demand stands between 20 and 40 tonnes, with roughly 10 per cent met through recycled jewellery and the rest entering via the baggage route or illegal imports.
Economist Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), said the domestic gold market is weakly linked to global trends and suffers from an opaque pricing process. BAJUS claims to follow a formula, but it is not disclosed, he said, noting that information such as total reserves, official imports, and daily trading volumes remain unavailable.
He added that pricing lacks competition and called on the Bangladesh Competition Commission and the Directorate of National Consumer Rights Protection to investigate how gold prices are being determined.
Courtesy: Prothom Alo Online
