Commodity prices shoot up once again

Almost all commodities that a family buys from the kitchen markets have once again witnessed a significant price hike.

From rice, lentil, oil, sugar, and flour to vegetable, egg, and chicken – no kitchen items refrained from following the suit of price hike.

It came as a fresh shock for the limited-income people who were already struggling due to inflation.

The increased price in the global market was blamed for the previous spell of price hike while the traders this time attributed the spiraling prices to high transport cost and cost of living.

The traders said the unprecedented hike in fuel oil price had a bearing on the kitchen market. It may even impact the prices of industrial products in the days to come.

State-run Trading Corporation of Bangladesh (TCB) regularly collects prices of essentials from nine kitchen markets in the capital and sends the price chart as a report to the cabinet secretary and other ministries and divisions concerned.

According to the TCB price chart, all varieties of rice, lentil, flour, coarse flour, bottled soybean oil, sugar, garlic, local onion, dry chili, ginger, egg, and broiler chicken registered a significant price hike since 4 August.

Only open soybean oil and turmeric powder went against the tide and recorded a slight price fall.

The TCB price chart does not contain prices of vegetables. However, most of the varieties were sold at Tk 50 to 70 per kilogram (kg) in the kitchen markets in the capital’s Mirpur-1 and Karwan Bazar area. The price is Tk 10 higher on average from that of the previous week. The price of green chili per kg crossed the Tk 250-mark while the sellers were demanding an additional price of Tk 20 for fish on average on Thursday.

When it comes to rice, the price went up by Tk 2 per kg for coarse rice and Tk 3 for medium and fine rice. The medium rice was selling at Tk 53 to Tk 58 per kg while the fine rice at Tk 65 to Tk 78 per kg. There was no rice in the market at a price below Tk 50.

However, a week is too short to portray the actual scenario of the rice market. The TCB data show that the price of coarse rice was Tk 30 per kg on 1 January, 2020, which implies a 67 per cent rise in rice price over the period.

Finance minister AHM Mustafa Kamal during a conversation with reporters at the secretariat on Wednesday said the rise in fuel price swells prices of all other commodities. It impacts the poor severely and pulls up the inflation rate – it is normal.

However, the government is working on the issue and initiatives are being taken to arrange relief for the poor and limited-income people.

The trend of hiking prices of all essentials at a time started at the beginning of 2020. The maiden coronavirus case in Bangladesh was declared on 8 March, 2020 and the new phenomenon of lockdown triggered a panic buying in the kitchen market. It pushed up the prices of all kitchen staples, including rice, lentil, oil, and sugar.

Adding to the woe, the commodity prices started to soar in the global market in mid-2021 when the improved pandemic situation increased demand. Later, the Russian invasion of Ukraine twisted the knife further in February this year. All commodities, including food and grocery items, have been going through a steady price rise since May as the dollar exchange rate then started climbing up.

The inflation rate reached a nine-year high in June. It fell slightly in July thanks to a modest drop in commodity prices. However, the relief was snatched by the government decision to hike fuel oil to a great extent.

The energy ministry revised the fuel oil price on 5 August, increasing diesel and kerosene price by Tk 34 to Tk 114 per liter, petrol price to Tk 130 per liter and octane price to Tk 135 per liter. It unavoidably propelled a hike in bus and truck fare, which eventually impacted the commodity prices.

The price of open and coarse flour jumped by Tk 3 per kg, bottled soybean by Tk 5 per liter, sugar by Tk 2 per kg, coarse lentil by Tk 10, local garlic by Tk 10, broiler chicken by Tk 20 and egg by Tk 13 between 4 and 11 August.

In some cases, the market price was found higher than the TCB chart. The coarse rice was found nowhere to be sold at Tk 50 as per the TCB chart; rather it was selling at Tk 52 to Tk 53.

The traders said the commodity prices are related to truck fare which jumped 20 to 25 per cent following the fuel price hike. Besides, there are some other issues that pushed up the price.

Egg and chicken, two pricier commodities of kitchen market, can be taken for a case study. The retailers are selling a hali (four pieces) of farm chicken egg at Tk 45 to Tk 48, though it normally costs around Tk 32. The broiler chicken is selling at Tk 180 to Tk 200 per kg, which normally remains below Tk 150.

Bangladesh Poultry Farm Protection National Council general secretary Khandaker Md Mohsin said the price of chicken feed has surged abnormally due to the drop in corn supply for Russia-Ukraine war and high shipping cost due to the dollar price. The production of egg and chicken has also dropped while the additional truck fare intensified the crisis.

The scenario is quite similar for rice price as the traders attributed the increased price to high truck fare, in addition to the excess price of paddy.

Joynal Abedin Pradhan, general secretary of Bangladesh Auto Major and Husking Mill Owner Association, Kushtia unit, told Prothom Alo that the paddy price went up by 150 per maund while the increased price of diesel pushed up the cost of paddy transport to mills by Tk 2,000 per truck.

The price of rice rose by Tk 2 to Tk 4 in Kushtia and Naogaon throughout the past week.

However, the truck fare was hiked to an extent higher than it was supposed to rise due to increased fuel price. A six wheeler consumes 60 to 70 liters of diesel to travel from the Chattogram port to Dhaka. The fuel price hike pushed up the travel cost by Tk 2,040 to Tk 2,380. But the owners increased the fare by Tk 4,000.

The insiders said the wave of price hike triggered by high fuel price will not stop here, rather it is feared to go longer.

Two issues may pull up the price further—1. The corporate suppliers will set new prices for their products by adjusting the additional transport cost in the coming days. 2. The production cost will increase in the agriculture sector that will eventually push up other prices.

The edible oil marketing companies have proposed to increase the price of soybean oil by Tk 20 per liter on August 3. As the fuel oil price rose later, they now want to adjust the price as per the additional truck fare.

The limited-income people have been hit hard by the price hike and are struggling to survive cutting expenses in various ways. Rubel, a salesman of a private company, sent his wife to the village home and took a seat at a mess for himself.

He said he could no longer lead the family with his income. He earns Tk 18,000 per month which turned inadequate to meet family expenses, including house rent, transport cost, and food cost. Besides, he has to send some money to his parents residing in the village home.