Price hike of essential commodities

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Syed Jamaluddin
The holy month of Ramadan is only a few weeks away. But the prices of essential commodities have started rising. Prices of vegetables have gone up substantially. The prices of fish are beyond the reach of the common people. The price of rice has marked a sudden rise. Reports in the media say the increased procurement price of rice has contributed to this rise in rice prices. The government plan is to start open market sale of rice which would bring down the price of rice. With a view to stabilising the market, it has reportedly taken steps to import certain quantities of rice and wheat. Govt. may intervene in the rice market by using other options such as food for work, test relief and vulnerable group feeding programme.
Fresh increase in the prices of essentials is causing uneasiness to the govt. Effective steps to discipline the market are yet to be taken. Govt. has not taken any decisive step against those who are believed to have been involved in manipulation of prices of rice, sugar and edible oil in recent times although they pledged to eliminate hoarding and profiteering syndicates before the election. The control of supplies of essential items such as sugar, edible oil and pulses by a few players, lack of effective market price monitoring and presence of middlemen in the supply chain are largely held responsible for the price hike. Stock piling and hoarding are also said to be among the major causes of price hike.
Every year prices of essential commodities go up as soon as the Ramadan approaches. This seems to be a set pattern. This may be happening this time also. The commerce minister has asked the newly elected board of directors of the Federation of Bangladesh Chambers of Commerce of Industry (FBCCI) to accept it as a challenge to keep prices stable in the month of Ramadan. In response, the FBCCI called upon the business community for keeping prices stable in the month of Ramadan. They arranged a meeting to exchange views on the price situation and set up a committee of 45 members. It is good that the FBCCI has given support to the govt. in monitoring prices but they do not have any mechanism for monitoring prices. They have to put in place a workable system to do the job.
In the FBCCI meeting, the wholesalers said that the mill owners did not supply commodities on time. They expressed the view that commodities will have to be imported to keep prices stable. According to them, Trading Corporation of Bangladesh (TCB) can not deliver goods as per their announcement, thereby creating crisis in the market. TCB has to be properly activated to contribute to market stability. The FBCCI President said in the meeting that they would oppose the dishonest traders. This is a good guesture from the apex trade body.
Economists feel that govt. may not procure rice and paddy from the domestic market when there is supply shortage in the home market. Govt. should import rice from abroad to keep prices under control. It must give top priority to price situation and work sincerely to save the people from distress. Mere statements will not be helpful; otherwise, this will increase the sufferings of the people and weaken the govt. position. This year international price of rice is reasonable.
TCB has set targets for import and procurement of commodities. But it has not yet been able to achieve one fourth of the estimated target. Some of these items are under process of procurement. Onion price is increasing but TCB has no plan for procurement of this item. There is still time to import onions without which price will go out of control on the month of Ramadan. Onion is a very sensitive item in the month of fasting.
The consumers are very much concerned by latest price movement of essential commodities. Despite assurances from the govt. and trade bodies, the ordinary citizens are scared of what might be coming during Ramadan. Holding meeting with traders and intelligence agencies proved unsuccessful in the past. Although no syndicate could be unearthed in the past, the possibility of price manipulation through an understanding among a section of big traders dealing in a particular commodity does exist. Hike in prices has not been always because of supply constraint. The greed of some unscrupulous traders to make higher profit at import, wholesale and retail stages is largely responsible for upward spiral of commodity prices.
The President of the FBCCI has said that only one per cent of traders are dishonest. Because of them prices of commodities increase in the month of Ramadan. The FBCCI would never side with the dishonest traders. If the govt. decides to punish the rogue traders in accordance with the law of the land, the trade bodies and the general public will support the move. The FBCCI will recommend to the govt. to cancel the various trade licences of the dishonest traders.
Price situation is discussed everywhere as it affects all sections of the people. Meetings are held in commerce ministry, the FBCCI and in the cabinet to tackle the price situation. What has possibly escaped the attention of all is the need for the punishment of the culprits. There is no record of taking action against the syndicates, hoarders and profiteers although the last caretaker govt. made some progress in these areas. During the last Ramadan, arrest warrants were issued against some dealers of sugar and they obtained anticipatory bail. It is not known what happened thereafter.
The purpose of this write-up is to focus on the need for taking action against the culprits. Warnings and threats were used in the past. But these did not have any impact. If punishment is given to the wrong-doers, it may restrain other offenders. Govt. may set an example of taking appropriate action to produce the desired result. Action against those who are responsible for price hike is the need of the hour.
The writer is an economist and columnist. He can be reached at e-mail: syedjamaluddin22@yahoo.com