The conflict in the Middle East is beginning to hit Bangladesh’s domestic markets. Instability has emerged in Khatunganj, the country’s largest wholesale market in Chattogram, where traders point to heightened international uncertainty.

Disruption to shipping and freight is raising the prospect of higher import bills. Prices for essentials such as edible oil, pulses, sugar and spices have already begun to fluctuate, while the supply of some items has tightened, putting pressure on wholesale prices. Further price rises are expected if the conflict is prolonged. Analysts say market stability will be difficult to achieve unless the international situation normalises. They also urge tighter and continuous monitoring to prevent profiteering by unscrupulous traders.

In Khatunganj, volatility flared suddenly on Saturday night. Prices of palm oil, soybean oil, sugar, wheat and various dried goods rose within hours. Although the underlying commodity prices moved only modestly, the price of delivery orders (DO/SO) surged by more than BDT 100 per maund (37.32 kg). At one point, some products were effectively without sellers.

But on Sunday, following the death of Iran’s supreme leader, the market softened slightly as the view took hold that the war might not drag on for long. Prices for oil, sugar, pulses and wheat swung hour by hour. Even so, wholesale prices are now at levels above those seen before the war.

Traders say the spike, while modest in absolute terms, has prompted a preference for hoarding over selling. The fear is that the Middle East conflict will push up fuel prices, with knock-on effects for the wider economy. That fear is now causing market instability in Khatunganj.

Demand for staples has somewhat eased in the middle of Ramadan, though dried goods and confectionery are now in high demand ahead of Eid. But traders believe the unease in Khatunganj stems from the same anxiety about fuel costs. Some are demanding higher prices for forward sales; others are sitting on their stocks. The calculation is simple: if the war is protracted, prices for key consumer goods will rise.

“The world economy has been fragile for the past five or six years,” Mosharraf Hossain Mintu, chairman of the Khatunganj-based MH Group, told Bonik Barta. “Now the conflict created by the United States with Iran has made things particularly difficult for Bangladeshi businesses. If fuel prices rise, it inevitably affects the cost of everything. As Dubai is the trading hub for most of our consumer goods, a prolonged war in the Middle East could have a negative impact on the domestic market. Everything depends on how long it lasts.”

According to market sources, refined open palm oil was trading at BDT 5,900 per maund (37.32 kg) on Saturday afternoon. Following the attack on Iran, its price climbed BDT 100 that evening to BDT 6,000. The next day it fell BDT 50 but has since firmed again, holding between BDT 5,970 and BDT 5,975.

Refined open soybean oil rose BDT 120 per maund, trading yesterday at BDT 7,180 in Khatunganj and BDT 7,120 in Dhaka’s Moulvibazar. Sugar prices increased by BDT 50 to BDT 60 per maund, with transactions at BDT 3,475 to BDT 3,480.

Similarly, wheat and pulses imported from various countries have seen upward pressure — a sharp reversal for a wholesale market where prices had begun to ease after Ramadan began.

Traders in Khatunganj believe fuel will bear the brunt of the Middle East conflict, with knock-on effects for the production, transport and marketing of all goods. They warn that higher energy costs will push up consumer prices globally. For major importers such as Bangladesh, the war also threatens to raise shipping and insurance expenses.

Economist Moinul Islam described the confrontation between Iran, the US and Israel as a perilous situation for the world economy. Speaking to Bonik Barta, he warned that with the closure of the Strait of Hormuz, fuel supplies would be cut, triggering abnormal price rises in global markets. “Iranian strikes across the Middle East would also be a major disruption to UAE-centric global trade. For Bangladesh, reliant on imports of fuel and all types of consumer goods, the war presents a significant challenge.” The scale of the economic fallout, he believes, will depend on how long the crisis lasts.