Traders unwilling to pass on full benefit to consumers

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Siddique Islam | Published: October 17, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

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Bangladesh's people have been deprived of enjoying desired benefit out of a significant fall in prices of essentials worldwide in the last one year, as the local businesses stood insulated from the global slump.    
The prices of consumer items like raw sugar, Soybean oil, palm oil and powdered milk dropped on the international market significantly last August over the same period a year ago, according to the central bank's latest statistics.
Raw sugar saw a price fall of over 30 per cent to nearly US$290 per metric tonne in August 2015 from $417.54 in the same month of 2014.
Milk-powder prices slumped 26.21 per cent to $2440.29 per metric tonne from $3306.92.
During the period under review, the price of crude soybean oil dropped by 21.31 per cent to US$710.61 per metric tonne from $903.07 while import value of crude palm oil declined by 18.80 per cent to $653.32 per metric tonne from 804.64.
"There is no visible reflection of the lower global commodity prices in the local markets mainly due to oligopoly in the marketing system," Ghulam Rahman, president of the Consumers Association of Bangladesh (CAB), told the FE.
The chief of the consumer rights group suggested that the government should adopt a policy to break the ongoing oligopolistic marketing system for ensuring perfect competitiveness on the market.
Currently, five to 10 business groups are dominating the overall consumer goods market in Bangladesh. As a result, the prices of essentials are not decreasing at desired levels on the local market, Mr Rahman, also former chairman of the Anti- Corruption Commission (ACC), explained.
Sugar price, on average, decreased nearly 9.0 per cent to Tk 40.50 per kg on October 16 last from Tk 44.50 in the same period of 2014 in the local markets.
Such market statistics came from the state-run Trading Corporation of Bangladesh (TCB), which also showed that the price of the imported edible oil on the local market dropped nearly 9.0 per cent to Tk 74 per litre (loose) on average Friday from Tk 85 a year before.
Palm-oil price fell 10.61 per cent to Tk 59 per litre from Tk 66, the TCB's market-monitoring data showed.
The former secretary called for making the TCB more effective to ensure smooth supply of essential commodities to the market, by way of necessary market intervention.
"The TCB should intervene in the market continuously, instead of occasionally, to check unusual price hike of commodities," Mr Rahman noted.   
The consumer rights group had earlier demanded effective enforcement of the competition law to prevent cartels or syndication of dishonest traders to curb unusual spiral in prices of commodities.
Talking to the FE, Manzur Ahmed, adviser of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), however, said business community has the right to fix the prices of their products in the free-market economy.
"But they have to justify the increment in the price to the regulatory authorities concerned in case of some consumer items," he explained.
Mr. Ahmed also said the tax authority of any free-market economic regime must also monitor the tax element in the price of the products, keeping in view the value addition to the respective prices.
The central bank of Bangladesh is monitoring the overall import situation closely to ensure smooth supply of essential commodities to the local markets, a senior official of the Bangladesh Bank (BB) said.
"We're submitting import monitoring report on consumer goods to the ministry of commerce regularly for taking necessary measures in this connection," the central banker said while replying to a query.
He also pointed at the traders' tendency to increase the prices of commodities as soon as a price rise occurs on the global market.
However, in case of price fall on the international market, they remain slow in adjusting the domestic prices, the central banker observed.
"Such practice should be stopped immediately," he said, as consumers also search ways for getting out this pricing paradox.    
    siddique.islam@gmail.com