The prices of at least four major essential items---rice, edible oil, sugar and salt---have recorded substantial rise in recent weeks. None barring the consumers seems concerned.
However, there is no way of knowing the level of concern among individual consumers. Media usually airs their concern. But that is not happening on appropriate scale for reasons best known to it.
Every time, prices of some essentials start rising on the eve of the holy month of Ramadan. The policymakers with a view to avoiding such an increase in essential prices hold series of meetings with the major players in the market of essential items, including edible oil, sugar, pulses, onion and some other spices. Traders make commitments not to make extra profits on the occasion of the holy Ramadan. But on most occasions they fail to keep their promises.
The price of coarse rice, generally consumed by the poor, has recorded a rise by nearly 43 to 44 per cent over the past four months. The prices of medium and fine varieties of rice have also recorded a notable rise during the period. And the policymakers are hardly doing anything.
There is no earthly reason for such a big hike in prices of the main staple in such a short period, according to knowledgeable circles. The production of rice in the country for consecutive seasons has been very good. In spite of sufficient domestic production, private sector had imported a substantial volume of rice during the last couple of years. In fact, there is no shortage of rice in the country as private storehouses and government silos are holding sufficient quantities of rice. International prices of rice had been stable in past months. Only in the last week, there was a low level of volatility.
The millers are obviously involved in some sort of profiteering move. They are apparently bent upon making extra profit until the arrival of the next rice crop, Aman.
Soyabean oil is another item now under the spell of a fresh price-hike. The trade cartel that controls the price of a few essentials such as sugar and edible oil had some weeks back approached the Ministry of Commerce with a proposal to hike the price of edible oil at the retail level in view of the increase in the international prices of the item. The ministry referred the proposal to the Bangladesh Tariff Commission (BTC) for scrutiny. But the traders could not wait for the BTC's recommendations and hiked the price of the item by Tk 6-8 per litre at the retail level. The BTC too recommended a hike, but at a lower level, around Tk.5.0 a litre.
Consumers are witnessing the most illogical hike in the case of sugar. A year back the retail price of the item was around Tk. 30 a kilogram. Now it costs Tk. 70 or more. Following the imposition of duty and taxes on the item at a rate between Tk. 13 and Tk.18 a kg, sugar prices started increasing. When the government consciously avoids levying of tax on essential items, it took an opposite stance in the case of sugar. Allegations have it that the hike in sugar price was deliberate with the objective of helping the loss-making sugar mills under government ownership. The cost of production at the state-owned sugar mills, which are financially sick and technologically obsolete, is very high, an estimated Tk 84 a kg. The import cost of the item was as low as Tk 25-26 a kg last year. The international prices of sugar have increased slightly in recent months, but that does not substantiate the level of hike in the domestic market. The government apparently has been allowing the private importers to make windfall profit at the cost of poor consumers just to protect the interest of its inefficient sugar mills.
Consumers are paying an extra amount on account of table salt and tanners on industrial salt because of delayed decision to allow import of salt and wrong selection of importers.
A kg of table salt is now being sold at Tk.38 as against its normal price ranging between Tk. 22 and Tk. 25. All concerned, including the Ministry of Commerce, was aware of the shortfall in the domestic production of salt. Yet the ministry took a decision to allow import of salt when the domestic price of the item started rising. However, the imported salt has failed to bring down domestic prices of the item because of the flaws in the selection of importers. The government, allegedly, sanctioned import permits to some salt mills that were out of operation since long. These mills sold the papers to others in the business and made money out of nothing.
It matters little who are at fault or responsible for the increase in prices of daily essentials. Ultimately, it is the consumers who are at the receiving end. The price hike does not affect the affluent people that much. But it surely hurts the poor as well as the fixed income people. In a free market economy, ideally speaking, there should be free and fair competition among the businesses without any sort of state control. But, in a few cases here, there are deviations, unfortunately.
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