Bid to tame market heat fails What's next

Shahiduzzaman KhanbrThe commerce ministry was reportedly surprised at the reports that prices of some food items had increased so abruptly. Despite hectic preparations and lobbying by the commerce advisers and officials, process of some essential commodities jumped ahead of Ramadan and the trend is continuing still during the holy month of fasting.brHowever, the daily reports on essential prices prepared by the government's Trading Corporation of Bangladesh (TCB) showed no such rise in the prices, even of the sensitive items, in the first two days of Ramadan. The TCB has been selling, at lower rates, items such as sugar, soya oil, chickpeas and onions from flatbed trucks and retail sales centres in Dhaka, Chittagong, Rajshahi and Khulna. brIn an emergency meeting at the commerce ministry, last week, the effects of different programmes such as the sales outlets run by the Bangladesh Rifles (BDR), TCB and textile sector associations to support the fixed-income and vulnerable groups were discussed. Some leading business groups, notably the BKMEA, have also opened some fair price outlets for their workers. There was no immediate reports about the outcome of the meeting.brCity dwellers are feeling the heat of the market with prices of Ramadan items and other essentials rising without any resistance. The prices of essentials started increasing since Shab-e-Barat, increasing overall food costs for households during the holy month. Consumers, especially the low-income group, are likely to suffer further as most moves being taken by the government authorities are failing to control the price hike.brAs per the inflationary data supplied by the Bangladesh Bureau of Statistics (BBS), inflation rate on food items reached 13 per cent in July measured on a point-to-point basis in recent time. Inflation on food items increased by 2.63 percentage point in July to 12.45 per cent compared to 9.82 per cent in June. According to Trading Corporation of Bangladesh (TCB) data, prices of coarse rice increased by 26.27 per cent, flour 44.19 per cent, lentil 10.40 per cent, soybean oil 41.35 per cent, onion 80.49 per cent and potato 2.63 per cent in the last one year. Prices of the most common iftar items like gram, peas, puffed rice, and dates have already gone up.brThe Dhaka-based think tank, Power and Participation Research Centre, in its latest market survey report says that the price-hike of essential commodities is a result of inefficient market management and lack of infrastructure for proper trade transactions. Consumers also blame the traders for raising the stakes to earn greater profits during Ramadan. Traders, on the other hand, transfer the blame to the shortage of supply and supply shocks like the recent floods which devastated a large part of the country.brMeanwhile, the government has formed a media committee to see how 'negative news' on commodity prices can be thwarted as reports on price hike have been seen as factors that fuel market volatility. Experts, however, see it as a tool for controlling the media and feel that there is no use of such a committee. According to what an information ministry official said the print and electronic media are not giving the real reports on declines in prices of essential goods, so consumers are being deprived of positive outcome of price fall. The ministry will take initiatives to ensure that the media plays a 'positive' role in letting people know when prices fall as they do in case of soaring prices, said the official.brThe eight-member media committee, headed by a joint secretary of the information ministry in a meeting, analysed the media reports on the local commodity market. Most of the members agreed that the media, both print and electronic, reported elaborately when prices of some items had gone up, but they were often reluctant to even have a mention in their reports when prices declined.br However, some market analysts argued that there was no necessity to control the media reports on price hike of essentials. Rather, the government should allow the media to publish real news on price hike of essentials across the country so that necessary interventions can be planned and made on time. The government has taken certain programmes in the budget to keep prices of essentials in check. If the programmes, like official import and procurement of food, are implemented properly, prices of essentials will be automatically stable in the market, they added.brThe media committee suggested that the state-run Bangladesh Television could easily show sales of commodities at the BDR fair price shops and open market sale outlets of TCB and the food ministry. Newspapers should publish price chart of essentials so that people can know the real prices of goods and bargain with the traders effectively. Private televisions and radio channels can air programmes like Bazarer Bag (shopping programme), a reality show run by BTV, to update the viewers on market prices, it said.br Prices of some commodities such as onion, sugar, spices, fish and liquid milk marked significant increase in the past week when the Ramadan began. Commerce ministry officials and leaders of trade bodies at several meetings over a few weeks had, however, said essential goods prices would not increase during this Ramadan. But the reality showed the reverse trend.brSugar price increased by Tk 2.0 last week to sell for prices between Tk 35 and Tk 38 a kilogram last week. Wholesalers said a 50kg sack of sugar sold for Tk 1,750 by late last week; the price was Tk 1,650 two weeks ago. After a decline in prices for two weeks, cooking coil remained somewhat stable on the retail market in the past week although prices kept declining on the wholesale market. Cooking oils were selling for prices 20 per cent higher than wholesale rates. Fine grade non-packed 'super palm,' the highest-selling variety of cooking oil, was retailed for Tk 100 a kilogram at Kaptan Bazar and Moghbazar last week. brMeantime, an FBCCI taskforce asked the administration to reduce unusual gap in prices of essentials between wholesale and kitchen markets in the city. After visiting different city markets last week, it stressed the need for regular monitoring of prices at the kitchen markets by government agencies to keep the prices stable and within the buying capacity of the common people.brDuring the visit, the members of the taskforce sought vouchers from retailers. But the traders said that wholesalers of Kawran bazaar didn't give them any receipt. According to the list given by the FBCCI commodities price monitoring taskforce at late last week, local ginger sold at Tk 40-45 a kg at Shyam Bazaar, and Tk 74-76 at Karwan Bazaar. At Shyam Bazaar a kg of aubergine sold for Tk 30-40 but at Karwan Bazar it was Tk 60-62. A kg of green chilli sold at Tk 50-60 at Shyam Bazaar but at Tk 60-70 at Karwan Bazaar. brThe taskforce also said traders at Karwan Bazaar were charging exorbitant prices for other essentials including onion, fish and cucumber. The prices go up further when it goes to retail market from wholesalers, it added. On visits to the two kitchen markets, the FBCCI team found that aubergine was selling at Tk 60-70, green chilli Tk 80, ginger Tk 80-90 and local onion Tk 32-34. br The price of essentials had risen well above the reach of the middle class and low income groups earlier and after beginning of Ramadan they are rising to yet another level. Ramadan has turned into the season for price hike. Every year, during Ramadan the prices skyrocket. This tradition has turned to a vicious cycle. Ramadan is supposed to be a month of religious devotion and joy. But the rise in prices turns it in to a dreadful one for all.brTo allay fears of the businessmen, the government has created a high-level reform committee, which will examine the laws and regulations, eliminate redundant and irrelevant laws, and simplify those that are needed. The government will intervene, if the prices of essential commodities continue to rise in Ramadan, in an apparent note of warning to the business community. It is thus expected that the government will keep its words by taking necessary action, when and where necessary. br..................................................................brszkhan@thefinancialexpress-bd.com