Vendors idle as briquette discount ends

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On April 3, Unuudur prepared a report on coal briquette sales outlets in Ulaanbaatar. Usually, these outlets are very busy, but they are seeing drastic decline in customers. Coal briquettes salesman R.Chuluunbat was very busy watching movies on his smartphone. He laughed loudly from time to time. Every time people passed by, he repeats, “Get some fuel, 3,750 MNT for a sack,” but doesn’t take his eyes off his phone.

He briefly spoke with reporters about his business.

Are sales good?

It's bad.

How many tons of coal brogues did you receive and how much did you sell today?

I got five tons in two day. Today, not even 10 sacks of briquettes were sold.

Is it like this every day?

Sales often decrease when the weather warms up, but it doesn’t get as bad as this. In fact, half a ton of coal briquettes would already be sold by afternoon.

What is the cause?

It’s the price that matters. But it will probably get better in a week

Why do you think that?

It is clear that people will buy coal briquettes a lot when their stock of coal briquettes run out.

R.Chuluunbat gave short and clear answers. A few steps away, at the end of Doloon Buudal, another salesman said, “When the warm season starts, most sales outlets close and the few remaining outlets operate until May and June. Many outlets around here have closed. However, the income of remaining outlets has not increased. For the last three days, there were very few buyers. We didn’t receive additional coal briquettes from distribution trucks today because we have large stock of coal briquettes to sell.”

A few days ago, there were crowds at these outlets. Vendors didn’t have time to “scratch” their smartphones, watch movies, or even sit down to eat or go to the bathroom. Before the delivery truck arrived, people lined up and rushed until the briquettes ran out. A lot of people wanted to buy more, but the sellers didn’t sell in bulk.

The same situation occurred not only in 18th khoroo of Chingeltei District, near Doloon Buudal, but also throughout the ger areas of the capital at the end of last month. Due to the pandemic, the price of coal briquettes was reduced by 75 percent. The government’s decision to “look after” the ger area folks led people to stock on coal briquettes before the discount faded.

Salesman R.Chuluunbat said, “Demand for coal briquettes has increased dramatically since March 20, when its price decreased. The stock ran out in a day. In order to make it as accessible as possible, people are told not to buy more than six sacks, but they said, “I will buy it for my father, mother, son and daughter. Eventually, I was afraid of arguments and gave as much as they wanted. We didn’t receive more stock of briquettes, because Tavan Tolgoi Tulsh LLC distributes according to a plan and schedule. At the time, sales outlets struggled to make people understand that.”

But now the situation is reversed. Since coal briquette price returned to 3,750 MNT on April 1, sales have fallen sharply. Vendors have a full stock and idle salespeople.

Unuudur reporters visited 7th khoroo of Songinokhairkhan District, which has the largest number of coal briquette sales points last Saturday, on April 3. They met with briquette vendors at the bus stop of Mongol Ceramic brick factory. The same things were said about the situation and the loss of income.

One of the salespeople said, “There was a huge demand for briquettes last week. The points in our area are close to each other, so we control each other. During the sale, I heard that some remote areas broke the rules. The price set by the government was doubled and sold for 1,800 MNT to 2,000 MNT, I heard. But, we followed the rule to not sell more than six sacks per person.”

“Citizens are critical of the government’s decision not to provide more than six bags of coal briquettes per household per week. This regulation will be implemented until the coal briquette production expands and the availability improves. It is explained that such arrangements are temporary. Even though the amount of briquettes that can be bought per week is regulated, there is no strict control over how many cards are used per household.”

When asked how much briquette stock she has, resident of 7th khoroo of Songinokhairkhan District B.Undarmaa said, “There are about 10 sacks. It is enough until April 20, due to warmer weather. During the hard times, when jobs are cut, the government made a wise decision to allow ger area households stay warm. Some say that supply of coal briquettes at a discounted price should be continued for up to five months. But this is an overstatement. We need to keep in mind that it takes a lot of money and work to produce coal briquettes.”

Resident of 7th khoroo N.Purevdorj said, “I have few sacks of coal briquettes, which is enough for the coming weeks. The shortage of coal briquettes (last week) was caused not only by citizens but also by sellers. How can people find it when sellers stash it away in order to sell it at a higher price?”

According to these people, both seem to have tried to take advantage of the government’s discount. In other words, they wanted to make more money or buy more than was permitted. But this is too selfish and is like stealing taxpayer money.

However, even if you buy briquettes at a lower price for a while, it will return to normal when reserves run out. Coal briquette salespeople expect sales to stabilize by the middle of this month. However, when asked about Tavan Tolgoi LLC’s plan, the company say that the demand for coal briquettes has been declining in March and April due to the warm weather. Sales fell by about 90 percent in the first week of this month due to the cancellation of the discount. Distribution and supplies were cut off at some sales points. It is expected to return to normal by April 20. The Mongolian National Chamber of Commerce and Industry was approached with a proposal to supply binders and bags for briquettes domestically to avoid the risk of interruptions for the production of coal briquettes due to border issues. There are no other problems with production, the company said.

Air pollution in Ulaanbaatar has noticeably decreased compared to previous years as residents of ger areas started using coal briquettes instead of raw coal, in compliance with the government’s ban on the use of raw coal in the capital. The government is spending a lot of money on briquette production and supplying them to the market at the most affordable price to fight air pollution.

Enkhnaranjav Tumurbaatar