Coping with Ramadan price spiral
Shahiduzzaman Khan | Thursday, 21 August 2008
The interim government appears to be firm about giving an effective check to the prices of essential commodities during the Ramadan this year. Hectic activities by the ministries concerned are being witnessed almost every day. It's like waging war on the kitchen market front! Now it is to be seen whether such war yields any result or goes in vain.
The commerce adviser is now a hell-of-a-busy man in drawing the battle-line against price-hike of the essentials before the month of Ramadan. He held a series of meetings with the leaders of the apex chamber body, leading businessmen, retailers and wholesalers on how to keep the prices under check during the holy month of fasting. He visited kitchen markets and saw for himself the demand and supply position of the essential commodities. The adviser ordered the authorities concerned to intensify their monitoring system for checking price-hike of essential commodities, ahead of the Ramadan.
Yet as usual, the prices of many commodities used in the month of Ramadan are on rise in the kitchen market. Rice price made a little jump this week, although it should have been stable in the wake of its adequate supply in the market. Chicken and beef prices have already registered a hike. So is the egg price, although this item has little demand during Ramadan. Prices of Masur variety of pulses and chickpea - two popular items of Ramadan month - are showing an increasing trend.
Although prices of soybean and palm oil are decreasing in the international market, its effect is yet to be seen in the domestic front. Price-drop in the global market is very significant for the last three weeks and it was expected that the prices should have started falling by now. But the refiners have bluntly said in a meeting with the BDR that there was no immediate chance of easing the soybean and palm prices. Even during Ramadan, they said the prices won't come down. The BDR said if the downtrend continues in the global market, the prices should come down during the Ramadan. However, it is to be noted that the retailers and the wholesalers in the market always blame each other for unusual rises in the prices of essentials. Retailers say the wholesalers hoarding essential commodities are responsible for the soaring prices while the wholesalers put the blame on the retailers for bumping up the prices to make a fast buck. This time also, there is no exception to that practice.
This year also, the BDR is doing a commendable job by opening a number of retail outlets in and outside city. Rice, pulse, edible oil, potato and various other items needed in the holy month are on sale there. Quite surprisingly, few buyers were seen at these outlets. The prices of the commodities available in these outlets are very near to that of the retail market. As such, people are not very encouraged to visit such sales centres.
The government has already formulated a set of consumer protection laws amid soaring prices of essentials, caused by a global spike and the alleged speculation and hoarding by a section of big traders in the country. The ordinance, already approved by the council of advisers, will provide the government necessary weapons to rein in 'any abnormal price hike' in the market. The law stipulates formation of a National Consumer Protection Rights Council to be headed by the commerce minister with representations from all the business bodies and relevant government agencies. The council will have branches at the district level.
Defending the consumer protection laws, a commerce ministry official said: It's true that in the open market economy, the government can't interfere directly in price-related matters, but there should have a regulatory body to monitor and punish culprits engaged in manipulation. The law provides that a guilty person can be penalised a maximum of three years in jail and Tk 0.20 million in fines. Hoarders and artificial price-hikers would get the maximum punishment.
Meanwhile, as an additional measure, the government resumed countrywide open market sale (OMS) of rice this week aiming to prevent further hike in prices of foodstuff before and during the holy month of Ramadan. The OMS has been launched in order to support the poorer segment of people, badly affected by soaring prices of rice.
The commerce adviser and many heavyweight government officials went for random market surveys for a number of times. What were the results? Nothing really. Market analysts say mere visits to wholesale and retail markets will not bear any fruit. It is necessary to break the unholy nexus of the business alliance. The government cannot sidetrack the issue citing reasons of globalisation. As Bangladesh joined the World Trade Organisation (WTO), the country is pledge-bound to implement free trade rules. But that does not necessarily mean that no action could be taken against the alleged manipulators of market forces.
Rice market is also being reportedly controlled by a business group that has been identified by the intelligence agencies. For this group's undue interference, rice prices are not coming down. Consumers expected that with the arrival of new aman crops, prices would come down considerably. Unfortunately, it has not happened. Wholesalers cite the rising transport and inflated production costs as the reasons but the moot point is: rice price ranges between certain levels and then go up suddenly without any justifiable reasons. Price-rise does not follow the demand and supply formula. As such, it is again the 'manipulators' who control the rice market.
The authorities must identify, with the help of the intelligence agencies, the culprits forming the cartel and punish them as per law of the land. The commerce ministry with the help of ministries of home and communications must streamline the transportation system of goods from one place to another for being without hassles. Extortion at various points must be checked. A set of guidelines should be introduced to monitor the price level of commodities and stem their artificial rise.
szkhan@thefinancialexpress-bd.com
The commerce adviser is now a hell-of-a-busy man in drawing the battle-line against price-hike of the essentials before the month of Ramadan. He held a series of meetings with the leaders of the apex chamber body, leading businessmen, retailers and wholesalers on how to keep the prices under check during the holy month of fasting. He visited kitchen markets and saw for himself the demand and supply position of the essential commodities. The adviser ordered the authorities concerned to intensify their monitoring system for checking price-hike of essential commodities, ahead of the Ramadan.
Yet as usual, the prices of many commodities used in the month of Ramadan are on rise in the kitchen market. Rice price made a little jump this week, although it should have been stable in the wake of its adequate supply in the market. Chicken and beef prices have already registered a hike. So is the egg price, although this item has little demand during Ramadan. Prices of Masur variety of pulses and chickpea - two popular items of Ramadan month - are showing an increasing trend.
Although prices of soybean and palm oil are decreasing in the international market, its effect is yet to be seen in the domestic front. Price-drop in the global market is very significant for the last three weeks and it was expected that the prices should have started falling by now. But the refiners have bluntly said in a meeting with the BDR that there was no immediate chance of easing the soybean and palm prices. Even during Ramadan, they said the prices won't come down. The BDR said if the downtrend continues in the global market, the prices should come down during the Ramadan. However, it is to be noted that the retailers and the wholesalers in the market always blame each other for unusual rises in the prices of essentials. Retailers say the wholesalers hoarding essential commodities are responsible for the soaring prices while the wholesalers put the blame on the retailers for bumping up the prices to make a fast buck. This time also, there is no exception to that practice.
This year also, the BDR is doing a commendable job by opening a number of retail outlets in and outside city. Rice, pulse, edible oil, potato and various other items needed in the holy month are on sale there. Quite surprisingly, few buyers were seen at these outlets. The prices of the commodities available in these outlets are very near to that of the retail market. As such, people are not very encouraged to visit such sales centres.
The government has already formulated a set of consumer protection laws amid soaring prices of essentials, caused by a global spike and the alleged speculation and hoarding by a section of big traders in the country. The ordinance, already approved by the council of advisers, will provide the government necessary weapons to rein in 'any abnormal price hike' in the market. The law stipulates formation of a National Consumer Protection Rights Council to be headed by the commerce minister with representations from all the business bodies and relevant government agencies. The council will have branches at the district level.
Defending the consumer protection laws, a commerce ministry official said: It's true that in the open market economy, the government can't interfere directly in price-related matters, but there should have a regulatory body to monitor and punish culprits engaged in manipulation. The law provides that a guilty person can be penalised a maximum of three years in jail and Tk 0.20 million in fines. Hoarders and artificial price-hikers would get the maximum punishment.
Meanwhile, as an additional measure, the government resumed countrywide open market sale (OMS) of rice this week aiming to prevent further hike in prices of foodstuff before and during the holy month of Ramadan. The OMS has been launched in order to support the poorer segment of people, badly affected by soaring prices of rice.
The commerce adviser and many heavyweight government officials went for random market surveys for a number of times. What were the results? Nothing really. Market analysts say mere visits to wholesale and retail markets will not bear any fruit. It is necessary to break the unholy nexus of the business alliance. The government cannot sidetrack the issue citing reasons of globalisation. As Bangladesh joined the World Trade Organisation (WTO), the country is pledge-bound to implement free trade rules. But that does not necessarily mean that no action could be taken against the alleged manipulators of market forces.
Rice market is also being reportedly controlled by a business group that has been identified by the intelligence agencies. For this group's undue interference, rice prices are not coming down. Consumers expected that with the arrival of new aman crops, prices would come down considerably. Unfortunately, it has not happened. Wholesalers cite the rising transport and inflated production costs as the reasons but the moot point is: rice price ranges between certain levels and then go up suddenly without any justifiable reasons. Price-rise does not follow the demand and supply formula. As such, it is again the 'manipulators' who control the rice market.
The authorities must identify, with the help of the intelligence agencies, the culprits forming the cartel and punish them as per law of the land. The commerce ministry with the help of ministries of home and communications must streamline the transportation system of goods from one place to another for being without hassles. Extortion at various points must be checked. A set of guidelines should be introduced to monitor the price level of commodities and stem their artificial rise.
szkhan@thefinancialexpress-bd.com