Price of essentials won't be controlled by statements

Although the price of potato generally remains cheap during this time of the year, this vegetable is being sold at Tk 50-55 per kg now, which is 57 per cent higher than last year.

According to an analysis of the price lists on 9 May in 2021, 2022 and 2023 of the agricultural marketing department, the highest price of potato per kg was Tk 22 to Tk 35.

Bangladesh does not import potato as the production is higher than the demand as per the government estimate.

The production cost of potato per kg is Tk 13.90. According to the agricultural marketing department, a fair price of potato per kg should be Tk 28.55. But potatoes are being sold at a higher price. The government is encouraging the export of potatoes instead of controlling the price. 15 per cent of cash as subsidies is also being given.

Prices of other items including onion, garlic, egg, chicken, beef, vegetables and spices have increased. Besides, rice, lentils, edible oil and flour are being sold at a higher price from earlier times.

Crisis of low income people has intensified amid high inflation.

After the election on 7 January, the new government talked about the priority of controlling inflation. The new cabinet held an inter-ministerial meeting and gave assurance of controlling prices of daily essentials. Later, duties on edible oil, sugar and date were exempted. However, the duties on edible oil was lifted after the Ramadan. Traders increase price by Tk 4 per litre.

Meanwhile, the price of electricity has increased in the new year. The price of power at the retail level was increased by 8 per cent in March. The price of diesel was decreased by Tk 3 and later Tk 1 was increased. But the transport cost has not decreased. Economists think that the pressure on the dollar has decreased as the interest rate on bank loans has been raised. As Bangladesh Bank introduced a new system (crawling peg) for setting rate, the price of dollar jumped by Tk 7, which may fuel inflation further.

Economists and businessmen said timely and specific product-based measures have to be taken to control the market. The market cannot be reined in by only meetings, setting up prices and words.

Speaking to Prothom Alo, Cold Storage Owners' Association and Federation of Bangladesh Chamber of Commerce and Industries former president Mostafa Azad Chowdhury said the price of potato went up during harvesting in March. Keeping that potato with a high price at the cold storage, it is not possible now to sell that potato at lower price. It was necessary to intervene at that time.

He also said a meeting was held at the commerce ministry at the end of April. It was said in the meeting that 10.4 million tonnes of potato have been produced in the last season.

However, according to the cold storage owners, the production of potato is not over 7 million tonnes. Bangladesh needs 9 million tonnes of potatoes. So there is a deficit and as a result, the price is increasing.

Mostafa Azad Chowdhury also said there is a gap between demand and production. The correct decision cannot be taken based on these statistics.
Price of essentials: Then, now

Pumpkin is a cheap vegetable. By analysing the price list of the agricultural marketing department on 9 May 2021 and 2022, the price of pumpkin was Tk 20 per kg. Now it is Tk 30. That means the price has increased by Tk 50 per cent.

The price of brinjal, a popular vegetable item, is worrisome. The price of brinjal was Tk 40 to 50 per kg in 2021, which increased to Tk 80 to 100 on Sunday, 13 May. According to the agricultural marketing department, the price of brinjal has increased by 157 per cent.

Overall the price of vegetables is very high. While visiting various markets in the capital for the last couple of days, it was found the price of most of the vegetables is Tk 60 to 80.

Pangas fish is an example of gradual price hike of fish. The price of pangas was Tk 120 to 140 in the Dhaka fish markets on 9 May 2021, which increased to Tk 180 to 250. The price of Rui, Katla and hilsa has also increased.

Bangladesh Institute of Development Studies (BIDS) director general Binayak Sen has said the food inflation in the country was 15 per cent in December 2023. Citing a survey of BIDS, he made the disclosure at an event organised to unveil a book at BIDS office in the city's Agargaon area on Thursday.

Sen also said the price of fish played the key role behind the high inflation. The price of fish increased by 20 per cent. The next is the price of chicken and eggs.

The price of chicken (Sonali variety) in the market is Tk 380 to Tk 400.
Traders said they never saw such a price hike. According to the agricultural marketing department, the price has increased by 15 per cent in a month. Four years ago, the price of chicken was Tk 220 to Tk 240. The price would increase at the end of winter. The price was Tk 260 to Tk 280 on 9 May 2021.

Let alone beef, the insolvent persons are unable to buy broilers and eggs. Four eggs are now Tk 50, which was usually between Tk 30 to Tk 40. The price of beef is Tk 750-800.

Economists, market analysts and traders said two trends of price hike are now seen in the market. Firstly, the price level has increased. Secondly, another is a temporary price hike. Citing the increase of price level, they said the price of soyabean oil jumped to 2,000 dollars per tonne in 2022. The price increased from Tk 100 to Tk 200 per litre in Bangladesh. Now the price of soyabean is below 900 dollars per tonnes in the global market. But the price of Soyabean is Tk 167 per litre in the country.

The reasons behind permanent price hike are depreciation of taka against dollar, frequent price hike of gas, power and fuel oil and cycle of inflation. If the inflation continues, the farmers, middlemen, wholesalers and retailers will have to earn more than before by selling equal amounts of commodities at a higher price. As a result, all start to take additional prices.

Economists said the reasons behind the price hike rather than the production costs are deficit in production and ban on import. As a result, scope is being created to increase price without competition. A deficit of supply has been created in the poultry sector due to death of chickens because of heat waves throughout April. As a result, the price has sharply increased. But there is no effort to import in order to control that. Moreover, there are no steps to tackle the price hike of poultry feed.

The agricultural marketing department reveals the daily market situation of 57 products. It is seen that prices of 25 products have increased in one month. Prices of 13 products have decreased. In most of the cases, the rate of decrease is very little and the prices of products with less demand have decreased.

Speaking to Prothom Alo, state minister for commerce Ahsanul Islam said the main strategy of market management is to ensure supply.

He said, "This is true that the low income people are suffering. We are trying to reduce their suffering.

When asked about the reasons behind the price hike of different essential items including eggs and chickens, the state minister for commerce advises to ask the ministries concerned.

The matter was asked to senior officials of the livestock ministry. But answers were not available.

Commerce ministry sources said when they want to open import of any product, the other ministry emerges as a bar. They don't get support by proposing reduction of duties and taxes. In this case, the high-ups of the government need intervention.  

After 2022, the price of dollars has been increased to Tk 117 from 86. Tk 7 has been increased last week. Businessmen said they bought a dollar for Tk 115-116 earlier. So the price of the dollar will not affect directly. However, import cost will increase indirectly.

Chattogram customs sources said duties on import have been set taking dollar price at Tk 110 into consideration in May. This may be Tk 117 in June. At that time, import duties may increase. Sources at the commerce ministry said the government got Tk 900 billion as duties and tax from 17 essential commodities in 2022-23.

Overall there is no good news for the low income people. Abdur Rahim, a driver and a resident at Bangla Motor area in the capital, said the price of everything has increased. However, my salary has not increased for one and a half years. As he is unable to run his family, he has kept his child to its grandmother. Now his wife also goes out for work.

According to Bangladesh Bureau of Statistics (BBS), the inflation has increased more than the income of the people for the last two years. As a result, the purchasing power of the people has decreased.

*This report, originally published in Prothom Alo print and online editions, has been rewritten in English by Rabiul Islam