How dependable is the assurance from businesses?
Sunday, 10 August 2008
As the holy month of Ramadan is drawing closer, the people who already have their back to the wall because of spiraling prices of essential commodities for more than a year, are becoming increasingly worried about another round of price hike. Traders have effected such a hike on the eve or during every holy month of Ramadan a tradition. Past governments could do little about restraining the traders from adopting such an unfair practice and the performance of the present caretaker administration that operates under emergency rules has been rather worse.
However, the government and the trade bodies, as usual, are busy in holding meetings to devise strategies for keeping the prices of essential commodities during the holy month stable. The commerce adviser held a series of meetings with different business organizations and importers of some items last Thursday where there came assurances a plenty from the businessmen to keep the price of essential items, including edible oils, sugar and powdered milk, stable during the month of Ramadan. The adviser appeared satisfied with the assurances. But if past is any guide he should not have any reason to take the assurances for granted. Actually, the trade bodies do not have any control over scores of wholesale and retail traders who make their own rules.
This was evident from the statement coming from none other than the chief of the price monitoring committee constituted by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). Contrary to the claims made so far by the trade promotion bodies the committee chief at a meeting organized by the FBCCI last Thursday admitted the existence of 'trade syndicates' in limited scale. He claimed that retail markets had their own price monitoring committees which dictated the price of various items, leading to a large gap in retail and wholesale prices. No trader dares to flout the rates fixed by the market committees for fear of punishment. A high official of a leading edible oil marketing company at the said meeting narrated how his company was asked by others in the same business not to sell edible oil at lower or reasonable rate. The FBCCI president, who chaired the meeting, was also critical of the role of a section of businesses who, according to him, maintained double standard in case of rise and fall in the prices of commodities in the international market.
The prices of most commodities in the domestic market are still high though the over-heated global market has been showing signs of abatement with the fall in the prices of many items, including cereals, edible oils and powdered milk, in recent weeks. The government, instead of accepting the businesses' assurances for keeping the commodity prices stable, should ask them to reflect in their price tags the latest developments in the international market. Such a step would be rather logical on the part of traders who spend no time in hiking the prices of their commodities on the plea of the increase in the prices of the same in the global market. It is a welcome development that a good number of fair price shops would be opened during the month of Ramadan at the government as well as private sector initiatives, notwithstanding the fact that these outlets would be highly inadequate compared to the need for the same. However, the initiative, if implemented successfully, would leave a cooling effect on the price level.
However, the government and the trade bodies, as usual, are busy in holding meetings to devise strategies for keeping the prices of essential commodities during the holy month stable. The commerce adviser held a series of meetings with different business organizations and importers of some items last Thursday where there came assurances a plenty from the businessmen to keep the price of essential items, including edible oils, sugar and powdered milk, stable during the month of Ramadan. The adviser appeared satisfied with the assurances. But if past is any guide he should not have any reason to take the assurances for granted. Actually, the trade bodies do not have any control over scores of wholesale and retail traders who make their own rules.
This was evident from the statement coming from none other than the chief of the price monitoring committee constituted by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). Contrary to the claims made so far by the trade promotion bodies the committee chief at a meeting organized by the FBCCI last Thursday admitted the existence of 'trade syndicates' in limited scale. He claimed that retail markets had their own price monitoring committees which dictated the price of various items, leading to a large gap in retail and wholesale prices. No trader dares to flout the rates fixed by the market committees for fear of punishment. A high official of a leading edible oil marketing company at the said meeting narrated how his company was asked by others in the same business not to sell edible oil at lower or reasonable rate. The FBCCI president, who chaired the meeting, was also critical of the role of a section of businesses who, according to him, maintained double standard in case of rise and fall in the prices of commodities in the international market.
The prices of most commodities in the domestic market are still high though the over-heated global market has been showing signs of abatement with the fall in the prices of many items, including cereals, edible oils and powdered milk, in recent weeks. The government, instead of accepting the businesses' assurances for keeping the commodity prices stable, should ask them to reflect in their price tags the latest developments in the international market. Such a step would be rather logical on the part of traders who spend no time in hiking the prices of their commodities on the plea of the increase in the prices of the same in the global market. It is a welcome development that a good number of fair price shops would be opened during the month of Ramadan at the government as well as private sector initiatives, notwithstanding the fact that these outlets would be highly inadequate compared to the need for the same. However, the initiative, if implemented successfully, would leave a cooling effect on the price level.