Daily essentials: Struggle to control market prices

The prices of daily commodities in the market was very high before the fall of the Awami League government. The prices increased further after the new interim government took over.

Concerned persons said that the interim government did not give as much importance as it should have to reduce the prices of daily essentials. Prices has already spiked and the government is struggling to control the market.

The government has started taking significant steps two months after it has taken over the power. Duty on some products have been reduced while it has been decided to reduce the duty on some other products. The market monitoring activities have been increased and task forces have been formed at the district level.

Import of edible oil and sugar has been decreased earlier, leading to increased prices. The price of eggs and broiler chickens are increasing at an unchecked rate. The price of rice and flour has also increased. There is no respite in the vegetable market either. All in all, people are in serious trouble with the market prices.

Coordinator of the Students Against Discrimination Hasnat Abdullah wrote on his Facebook page on Wednesday that the eggs are bought and sold four times in the Karwan Bazar while those are still in the truck. So far this government has not been able to smash “syndicate”. Only the names of the syndicates have changed. He questioned the initial achievements of the student-people uprising if the syndicate could not be broken to control the prices?

The Awami League government fell in a student-led mass uprising on 5 August. The prices of daily commodities soared sharply in the last two and a half years of that government. The government also increased the prices of electricity, gas, fuel oil, water and fertiliser.

Massive participation of low-income people in the movement to topple the government and the deaths of working class people suggest the increase in the cost of living had made them frustrated, concerned people think.

Speaking about commodity prices in his first address to the nation on 25 August, the chief adviser of the interim government Dr. Muhammad Yunus said the government has activated initiatives to control commodity prices and inflation to make people’s lives easier.

After the new government took over, the Bangladesh Bank adopted a policy of reducing the supply of money in the market to control inflation. The import duty on onion and potato was reduced at the request of the commerce ministry on 5 September. No more steps than this were taken. As a result, the price of some other products increased. Then sugar duty was reduced on Wednesday. Earlier on Tuesday, permission was given to import 45 million eggs.

A source in the government said it was recently decided to reduce the duty on edible oil and eggs at a high-level meeting on commodity prices. Notification in this regard is likely to be issued soon. But the measures were all taken after the price hike, not before.

Speaking about this, finance and commerce adviser Salehuddin Ahmed told newspersons after a meeting of the advisory committee on government procurement at the secretariat Wednesday that the government is working to control inflation. It will take some time.

According to the National Board of Revenue (NBR), soybean and palm oil imports fell by 9 per cent in the first three months (July-September) of the ongoing 2024-25FY. In the first three months of the previous financial year, 553,000 tonnes of soybean and palm oil were imported. The import has fallen by 53,000 tonnes in the first three months.

Palm oil is the most widely used edible oil. Low income people mainly use loose palm oil. This oil can also be used in the food industry. In the last three months, 332,000 tonnes of palm oil have been imported, which is 17 per cent less than the same period last year.

Some mill authorities in the country import soybean seeds and produce oil from those. The import of soybean seed also has decreased by 22 per cent to 238,000 tonnes in the three months.

According to the state-owned Trading Corporation of Bangladesh (TCB), unbottled palm oil prices in the retail market increased by Tk 9-10 per litre in a month as the price stands at Tk 140-144. The price of unbottled soybean oil has increased by Tk 3 per litre and is being sold at Tk 151-155.

In the last three months, the import of unrefined sugar has been 239,000 tonnes, which is 51 per cent less year-on-year. Traders said that the reason for the decrease in imports is smuggling. Sugar comes illegally from India. Due to this they have reduced the import. However, smuggling has decreased somewhat since the interim government took over but the import has not increased. The price of sugar has also increased a bit in the global market. Due to this, the price of sugar is increasing.

According to TCB, the current price of sugar is Tk 125-135 per kg, which was Tk 125-130 a month ago.

The government Wednesday reduced the regulatory duty on raw and refined sugar to 15 per cent from 30 per cent to reduce prices. According to NBR, this will reduce the import duty on raw sugar by Tk 11.18 and on refined sugar by Tk 14.26. It should be noted that till now customs duty was Tk 43 for import of one kg sugar.

Onion import has also decreased in the last three months. The imported amount was 155,000 tonnes, which was 350,000 tonnes in the same period last year. The price of the product has increased by Tk 5-10 per kg despite the reduction in duty. According to TCB, the onion is now being sold at Tk 100-120 per kg.

The people concerned say that the supply has to be increased along with reducing the duty. Besides, the market needs to be monitored so that the price comes down.

Importers blamed giving special benefits to some industrial groups for the decrease in imports.

According to them, before the fall of the Awami League government, S Alam and the groups related to their interest used to buy dollars from the banks they controlled at the official rate. But the general importers had to buy dollars at the market price, which was Tk 8-10 higher per dollar. This created an unhealthy competition in the market.

As a result, other major groups were forced to reduce imports. The BSM group that was once among the top five importers of consumer goods is now out of the market for this.

Imports of a few industrial groups have decreased after the change in political scenario. According to the NBR data, during July-September of the last financial year, S Alam Group imported 200,000 tonnes of onion. In the same period this year, the group import decreased to 83,000 tonnes. In the same time, imports of Bashundhara Group have come down from 110,000 tonnes last year to 50,000 tonnes this year.

Abul Bashar Chowdhury, chairman of BSM Group, which once was a leading consumer goods importer, told Prothom Alo that they have been forced to reduce imports due to the increase in the dollar price and unfair competition. Many people will become active in the market if the dollar price remains the same for everyone.

After the change of the government, the bank accounts of directors of S Alam Group, Nabil Group and Bashundhara Group were seized. The traders, however, have said that the capacity of large industrial groups like Meghna Group of Industries (MGI), CitiGroup and T K Group to import, refine and produce consumer goods is more than the domestic demand. There will be no crisis in the market if they remain active, they added.

Meghna Group of Industries chairman Mustafa Kamal told Prothom Alo, “We are increasing imports again. There will be no opportunity to increase the price due to the crisis.”

Speaking about the overall situation, professor of economics department at Dhaka University Selim Raihan told Prothom Alo that the low and small income people hoped the cost of their living will be reduced after the mass uprising. But that has not been fulfilled. Rather, the prices of some products have increased. The importance that was required in this case was not given to the matter. Some steps are now being taken.

He further said some more steps need to be taken to ease people’s sufferings. Coordinated steps of monetary and duty policies and effective market monitoring is required.

* The report, originally published in the print and online editions of Prothom Alo, has been rewritten in English by Shameem Reza