Prices of key essential items have soared up in recent times in the domestic market, fueling further people's overall cost of living. And the unbridled price spirals have put the commoners in dire straits. Prices of rice, most of the vegetables and different spices, especially onion, have almost gone beyond the purchasing power of the consumers in recent times. Such high prices came as a blow to especially the lower-and middle-income groups, who are heavily burdened with other expenses, especially in respect of their children's rising educational cost, utility bills, transportation, healthcare and house rents ect. People belonging to the lower-middle class and working class are hardest hit by the increased cost of living.
According to a recent survey by the Consumers Association of Bangladesh (CAB), the cost of living for Dhaka residents had gone up by more than 70 per cent over the period between 2009 and 2016. The CAB survey was conducted based on a calculation of price hikes of some 114 foodstuffs and 14 utility services (excluding cost rise of education, health and daily travel).
Consumers' misery began a few months back when the prices of rice -- the main staple food -- marked a significant rise. The sudden price surge of rice -- both course and finer varieties -- occurred in the face of flashfloods that badly damaged standing crops in the country's hoar areas. And subsequent flooding in the country's northern districts also affected smooth supply of rice and vegetables to the market.
Prices of different varieties of course rice surged to Tk 55 per kg in June last at the retail levels while those of finer varieties also hit Tk 65 to Tk 75 a kg against previous rates of Tk 50 and Tk 60 respectively.
It was claimed that private traders took advantage of a depleted rice stock in government warehouses. The government rice stock was learnt to have come down to as low as 0.17 million tonnes against the minimum requirement of 1.2 to 1.5 million tonnes for coping with any possible shock. Although the government made extra efforts to boost its food-gain stock, especially rice, through import, the rice price, in the meantime, had already gone up significantly on the global market. The government then started procuring rice from external sources and it, somehow, managed to collect non-parboiled rice to tackle the situation. But, such delayed initiative made the government count an extra cost in foreign currency for the rice import.
In the wake of an unusual rise in the prices of rice, following alleged market manipulation, the government launched a crackdown on 'illegal hoarders' and unscrupulous rice traders across the county. It also sat with rice importers and traders to help cope with the situation. But such steps had hardly yielded any visible impact on the market.
Although the government started selling non-boiled rice just ahead of the Holy month of Ramadan through OMS (open market sale) to help ease rice prices, such market intervention hardly made any positive impact mainly because of a poor demand for the same (non-boiled rice). Besides, the government also doubled the price of rice under the OMS to Tk 30 per kg, which was also responsible for the situation.
Though the prices of rice have registered a slight downward trend in the recent days mainly due to arrival of imported rice at comparatively lower rates, the price indices are yet to come down to the previous levels. Rice prices are still maintaining Tk 10 to Tk 12 per kg or higher.
When the consumers were bearing the brunt of soaring rice prices, the price of onion suddenly hit a new high in the market. Prices of onion almost doubled to Tk 85 per kg in recent days. Such an unusual rise in the onion price also prompted the government to sit with traders and take other administrative steps for helping ease the prices of the essential spice. But efforts failed to make any positive impact on the local onion market.
When the onion prices had been bringing consumers to tears, green chilli started burning a hole in their pockets. The prices of green chilli also rose by more than Tk100 per kilogram to Tk250 to 280 in recent times.
On the other hand, prices of most of the vegetables have also been on a sharp rise over months. Now, no vegetable costs below Tk50 a kg in the retail markets.
Prices of particular essential items often become volatile in the country. Usually, some factors like supply shortage, presence of syndication and middlemen, extortions and poor monitoring and supervision by the authorities concerned are blamed for the same. The government usually starts acting at a time when prices of any particular essential item(s) go up abnormally. Among the common practices, the authorities concerned sit with the traders to find ways out of the spirals. Although the respective traders often assure the government of lessening the prices, consumers hardly get rid of the price spirals.
It was noticed that the Ministry of Commerce in its previous meetings with traders had fixed the certain selling rates of edible oils, the item was seen trade at considerably higher than the fixation.
Initiatives from authorities, sometimes, go in favour of traders instead of benefiting consumers. For example, authorities of Dhaka city corporations in their meeting with meat traders fixed maximum retail price of beef, among other meats, at Tk 420 per kg just days ahead of the holy month of Ramadan a couple of years back, but, ironically, it was then selling at Tk 380 to Tk 390 a kg. Interestingly, the price of beef did not come down to the previous level even after the end of the month of fasting. Moreover, hike in the prices of beef and mutton continued unabated.
Consumers' interests are not well protected in Bangladesh. They often find it difficult to have their desired products at reasonable prices. Rather, middlemen and vested-interest groups make the most out of the existing trading system. As a result, both the producers/farmers and consumers are mostly deprived. Due to active presence of middlemen and other 'corrupt practices', different kinds of agricultural produce sell at prices abnormally higher than those of growers' levels. For example, farmers get not more than Tk 20 to 25 per kg for brinjal (eggplant) while consumers in Dhaka are to by the same at Tk 50 to 60.
Although there are certain regulatory bodies and some rules and regulations in the country for looking into consumers' interests, neither the authorities concerned act properly nor rules and regulations are seen enforced accordingly.
Among the legal frameworks, the government adopted 'the Consumers' Rights Protection Act' some years back to safeguard the interest of people/consumers. But, the law has also some drawbacks. Among major drawbacks, the law has not empowered the affected consumers to sue errant vendors directly. Rather, consumers are able to make complaint with the Director General of the Directorate of National Consumer Rights Protection (DNCRP) as per the provision of the law.
Besides, a Competition Act was also enacted in June 2012 in order to help ensure fair business practices in the country. The key objectives of the law were to ensure quality products with competitive prices and check all kinds of anti-competitive business activities.
Among others, the Competition Act has incorporated a provision making it mandatory for creation of Bangladesh Competition Commission (BCC), which will be responsible for the application and implementation of the law.
But, no positive outcomes from the enactment of the law have yet been visible as it took nearly three years to form the Competition Council. Moreover, the Competition Commission still remains almost non-functional in absence of necessary manpower and other logistic supports.
According to experts, the government needs to take prudent steps to help early activation of the Commission for the sake of attaining the desired purposes.
Considering the overall situation, one can suggest that apart from proper enforcement of the relevant laws, and other rules and regulations, there is an urgent need for strengthening monitoring and supervisions from the authorities concerned to avert any unusual price kike of essential items in the market. Besides, the government must have appropriate data on production and demand for commodities for the sake of preventing any untoward supply disruptions in the market.
The writer is Chief Reporter of The Financial Express.
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