The interim government has taken various initiatives to keep the prices of essential commodities in check, but the effort did little to control the market. Prices of some commodities even went up further in the last three months.
Prices of edible oil, onions, potatoes and broiler chicken have seen the highest amount of rise while rice and sugar prices also increased a bit. Only Anchor dal’s price has decreased. The prices of vegetables had been high until recently.
This picture has been found during visits to different kitchen markets in Dhaka city in the last two days. Information of Trading Corporation of Bangladesh (TCB) also corroborates this picture. Inflation has also increased as per Bangladesh Bureau of Statistics (BBS).
The overall inflation shot up to 10.87 per cent in October, the highest in the last three months. The food price inflation rose to 12.66 per cent. Long queues are seen to buy TCB goods at subsidised prices.
A private job holder Aynal Haque came to buy vegetables in Karwan Bazar on Saturday afternoon. He said he cannot run the family despite earning Tk 60,000 monthly.
The interim government has recently published data of initiatives, achievements and work plans of different ministries and government organisations.
The commerce ministry mentioned reducing tariffs on duty on potato, onion, edible oil and eggs. It has been said that the ministry of commerce has formed a special 10-member task force at the district level from 7 October to monitor and review the market situation and supply system of daily commodities. The National Directorate of Consumer Protection is conducting regular drives and fined 6,573 establishments in August-October.
Although initiatives have been taken to increase the import of some products, it has not increased that much and the price has not dropped much either. For example, the import of eggs has been allowed on the one hand while on the other hand the department of livestock issued a gazette on egg imports stating imported eggs must go under tests on three diseases at ISO-certified labs. Due to this order the traders have lost interest in importing eggs.
Meanwhile the food ministry said political involvement of many Open Market Sale (OMS) dealers led to stop selling products. The tenure of the dealers was also not specified. As a result many dealers were involved with irregularities.
The interim government has made OMS and Food Friendly Programme Policy up to date. The process to prepare a database is going on. All kinds of duties have been exempted to stabilise the rice market.
To control inflation, the Bangladesh Bank increased the policy interest rate with an aim to reduce the supply of money in the market.
Bangladesh Bank governor Ahsan H Mansur told Prothom Alo last Saturday that the inflation rate was manipulated for so long. Now the actual calculation is being reported.
He further said there was a flood in some regions that also had some effect on the market. But as winter is coming, the prices of vegetables have started to come down. Meanwhile, the opening of Letter of Credit (LC) has been made easier to maintain the supply chain.
“We won’t give any fake hope. Despite taking so many steps we can say that eight more months are required to drop the inflation to 5-6 per cent. We don’t have much to do except for what steps have already been taken. The monetary policy is already as contractionary as possible. We paused for a while. More contractions can be taken later.”
Are government initiatives enough?
The government has increased the selling of rice at Tk 30 per kg and flour at Tk 24 per kg through the OMS programme of the food directorate.
The previous initiative under the Food Friendly Programme Policy to sell 30 kgs of rice at Tk 15 per kg in five months (September-November and March-April) for five million families has also been going on.
The agricultural marketing department is selling a package of 10 agricultural products including eggs, potatoes, green papaya and other vegetables at an affordable rate. The government on 15 October took up the initiative under the OMS programme.
Edible oil and lentils are being sold to the TCB’s family card holders. Onion was sold earlier but closed for now. Apart from this, TCB is selling daily commodities at subsidised prices by trucks. However, many people have to go back after standing in queues behind the TCB truck without getting the product. This activity is limited to urban areas only.
Market analysts feel that there is a need for a wider range of commodities to be sold through the TCB and food department, so that more people benefit.
LC opening less for six products
According to the data of Bangladesh Bank, compared to the same period of the previous year, LCs of at least six types of daily commodities have been opened less in the four months from July to October this year. These include crude soybean oil, palm oil, onions, chickpeas, refined sugar and dates.
LC opening has decreased most for onions. In the first four months of the current financial year, compared to last year, LC opening for onion import has decreased by around 200,000 tonnes. However, the opening of LCs for the import of soybean seeds, lentils and unrefined sugar has increased.
Prices of some goods have been increasing in the global market too.
According to the commerce ministry the price of edible oil has increased by 30 per cent compared to a year ago. However, prices of both refined and unrefined sugar fell by 20 per cent. The price of lentils has decreased.
Commerce secretary Moha Salim Uddin told Prothom Alo, “We are holding meetings with traders to keep the supply and prices fixed. They promised to cooperate. I am also listening to the problems they are facing. Solutions have been taken and there will be more.”
Supply needs to be increased
Market-analysts think that increasing supply is important to rein in prices. If the import does not increase, reducing tariff only would not produce any result. This is exactly what happens in the case of rice, onions, potatoes and eggs.
Golam Rahman, former president of Consumers Association of Bangladesh (CAB), told Prothom Alo, “Reducing tariff is a method but this does not produce any result in most of the cases. I think maintaining the supply chain and controlling those who disrupt it are important. Extortion also needs to be curbed.”
“I don’t have much to say if the government takes the fact lightly that a group has left after extortion and another group will take charge,” he added.