Five big importers control essential commodities’ mkt
Friday, 29 June 2007
Only five largest importers hold sway over some 50 per cent of total import of essential commodities, making the market vulnerable to syndication, traders and analysts said Wednesday.
The observation came out in a discussion on the price hike of daily essential commodities, broadcast on BTV at 9:00pm Wednesday, reports bdnews24.com.
BDR Director General Shakil Ahmed appeared in the programme Shomoyer Kotha, anchored by Syed Munir Khasru.
"The situation has been created due to the government's inability to intervene in the market. The government has no control over the market", Bangladesh Institute of Development Studies (BIDS) Research Director Md Asaduzzaman said.
The BIDS research director said the state-run Trading Corporation of Bangladesh (TCB) has decisively failed to intervene in the market when it needed to.
Centre for Policy Dialogue (CPD) Research Director Mustafizur Rahman and Khatunganj/Aminbazar Byabosayee Samity chairman Idris Ali also took part in the discussion.
Idris blamed spiralling prices on lack of cooperation by banks and the government's initial anti-graft crackdown.
They said a hike in commodity prices in the global market, poor rice yield, presence of middlemen in supply chain, and banks' reluctance to extend credit to small importers are pushing the essentials' prices higher.
"Banks are favouring these big importers. In practice, they are not extending financial assistance to small importers", said Idris, referring to a central bank directive.
The Bangladesh Bank earlier asked banks to encourage small traders to import essentials.
A rise in global commodity prices is also fuelling the local market prices, he said.
According to the talk show, the five big importers account for 64 per cent of total sugar and 31 per cent of onion imports.
"We have suggested subsidies to rice for the extreme poor. This safety net programme can be undertaken either through open-market sale (OMS) or vulnerable group feeding (VGF)", the BDR chief said.
"But excluding rice, independent competition and strong supervision from the government is needed", he said.
The BDR, which started selling selected essentials at a fair price since March 15, now operates in 26 spots in Dhaka, 95 places in the other divisions and in 121 spots in 30 districts.
It is also planning to start operations in 200 more places.
The BDR chief said they have started intervening in the market by borrowing from the banks at 14 per cent interest.
"We are using rented vehicles, procuring goods from farmers and importers at the market rate. However, we retain a marginal 5.0 per cent profit", he said.
Citing middlemen's influence in the supply chain, he said, "Middlemen exploited the farmers' desperation to sell off their produce."
"We will start a large-scale operation one month before the Ramadan to stop corrupt businessmen's influence in the market", he added.
The observation came out in a discussion on the price hike of daily essential commodities, broadcast on BTV at 9:00pm Wednesday, reports bdnews24.com.
BDR Director General Shakil Ahmed appeared in the programme Shomoyer Kotha, anchored by Syed Munir Khasru.
"The situation has been created due to the government's inability to intervene in the market. The government has no control over the market", Bangladesh Institute of Development Studies (BIDS) Research Director Md Asaduzzaman said.
The BIDS research director said the state-run Trading Corporation of Bangladesh (TCB) has decisively failed to intervene in the market when it needed to.
Centre for Policy Dialogue (CPD) Research Director Mustafizur Rahman and Khatunganj/Aminbazar Byabosayee Samity chairman Idris Ali also took part in the discussion.
Idris blamed spiralling prices on lack of cooperation by banks and the government's initial anti-graft crackdown.
They said a hike in commodity prices in the global market, poor rice yield, presence of middlemen in supply chain, and banks' reluctance to extend credit to small importers are pushing the essentials' prices higher.
"Banks are favouring these big importers. In practice, they are not extending financial assistance to small importers", said Idris, referring to a central bank directive.
The Bangladesh Bank earlier asked banks to encourage small traders to import essentials.
A rise in global commodity prices is also fuelling the local market prices, he said.
According to the talk show, the five big importers account for 64 per cent of total sugar and 31 per cent of onion imports.
"We have suggested subsidies to rice for the extreme poor. This safety net programme can be undertaken either through open-market sale (OMS) or vulnerable group feeding (VGF)", the BDR chief said.
"But excluding rice, independent competition and strong supervision from the government is needed", he said.
The BDR, which started selling selected essentials at a fair price since March 15, now operates in 26 spots in Dhaka, 95 places in the other divisions and in 121 spots in 30 districts.
It is also planning to start operations in 200 more places.
The BDR chief said they have started intervening in the market by borrowing from the banks at 14 per cent interest.
"We are using rented vehicles, procuring goods from farmers and importers at the market rate. However, we retain a marginal 5.0 per cent profit", he said.
Citing middlemen's influence in the supply chain, he said, "Middlemen exploited the farmers' desperation to sell off their produce."
"We will start a large-scale operation one month before the Ramadan to stop corrupt businessmen's influence in the market", he added.