Consumers count losses, retailers rake in profits

Unrefined salt sold at Tk 1,200 per 75kg last year. At that time, in Dhaka, the Maximum Retail Price (MRP) for the best refined salt of various companies was Tk 35-38kg. The price of the same unrefined salt has fallen below Tk 600, but the MRP did not decrease at all. The salt cultivators are not receiving better prices nor are the consumers being benefitted.

Various companies are selling their best quality salt at Tk 23-25kg to the retailers enabling them to profit Tk 10-15 per kg, but the consumers are still buying this on the old price.

This is a common scenario for not only salt but edible oil, powdered milk, and aromatic rice too, according to companies, distributors and retailers.

Commodities are sold at lower prices than the MRP at big markets including Chawk Bazar, Karwan Bazar, Mohammadpur Krishi Market and Kaptan Bazar in the city, but this only benefits people of the higher income bracket who can afford to buy in bulk. The low income people have to buy the same products as per the MRP stated on the packets at local markets and groceries.

A retailer at Karwan Bazar says he buys a five litre oil container at Tk 480, but the MRP of Tk 530 enables him to profit Tk 10 per liter.

The national committee formed to fix prices in 2011 determined the profits margin for edible oil sales at one taka for edible oil companies, two taka for distributors and three taka for retailers. This was later increased to two taka for the companies and four taka for the retailers, but was not maintained.

A retailer at Kazipara told Prothom Alo, he can buy the powdered milk of a certain brand at Tk 480, but the maximum retail price is Tk 520.

Four corporate institutions were asked why they were allowing the retailers to profit at such high rates. The main reason, they said, was the retailers would not take the companies’ commodities if they were not allowed to make the extra profit.

Two meetings were held at Bangladesh Tariff Commission over edible oil and salt on Wednesday. One of the major commodity marketing companies there alleged that it became hard to sell products in the market if the edible oil retailers were not allowed to profit Tk 10 per litre when the company itself could not profit more than Tk 1.5 per litre.

"We sell salt at Tk 20-22kg. A one-sided decrease of MRP won't solve the problem. The commerce ministry must intervene," said Paritosh Kanti Saha, chairman of Pubali Salt and former president of Salt Mill Owners Association.

*This report, originally published in Prothom Alo, has been rewritten here in English by Nusrat Nowrin.