There is no supply constraint of essentials like onion, gram, lentil and garlic. Stocks of these items are adequate. But prices of these items are rising. There is a tendency to raise the price of edible oil although international prices are falling. Prices of these items generally rise during the month of Ramadan. But this time prices have gone up before its arrival. Attempts are being made for further increase.
There are strange reasons for price hike. There was earthquake in Nepal. So the price of lentil in Bangladesh has gone up. Of course, Nepal is a source of its supply. There was heavy rainfall in onion-producing districts including Kuchbihar. So the price of onion has registered an increase. Import of onions from India was only 20 per cent this year. Dishonest traders have taken advantage before the administration could take steps. Increase in prices has been noticed at wholesale as well as retail level.
It was found in the analysis of Trading Corporation of Bangladesh (TCB) that the price of lentil was Tk 72-115 per kg at retail level on May 25 of last year. On the same day this year the price stood at Tk 115-118 at wholesale level. The item is being sold at Tk118-125 per kg at retail level. Although onion was selling at Tk30/35, it has gone up to Tk 50 (local) and Tk 40 (Indian) per kg. Similarly, the price of gram has gone upto Tk 60-100 from Tk 50-80 per kg. Dates are selling at Tk 220 currently. Earlier it was selling at Tk 90-150 per kg.
Nobody is taking responsibility of the price increase. Retailers are blaming the wholesalers who in turn shift the blame to manufacturers and importers. The manufacturers and importers are saying that wholesalers and retailers were responsible. Price of meat is on the rise for the last few months. This is because import of cattle from India has slowed. Student organisations in India are opposing export of cattle to Bangladesh. An Indian minister also spoke of reducing export of cattle to Bangladesh. India may be looking for more export of meat to other countries.
There appears to be no reason for hiking the prices of lentil, onion, sugar, edible oil, dates, garlic, ginger and dry chillies. Letter of credit opening by banks and production figures of agriculture ministry support this view. The ministry of commerce is of the view that there is no cause for price rise throughout the year. In some cases, supply is more than requirement. The minister is unwilling to admit the rise in prices. The government has taken steps to control prices. Supply and stocks are normal. Prices are supposed to be normal.
The reality is that price is increasing in the market. Intelligence agencies have submitted a report to the commerce ministry about those who may be involved in hiking prices. Involvement of some big importers, traders and producers was reported. The government is working on intelligence reports.
Some facts about production, import and supply situation of a few essentials are given below.
Currently there is a demand for 1,45,000 tons of edible oil in the country. Local production is 3,00,000 tons. From July to April 15 of the current year 1.16 million tons of edible oil was imported into the country, according to the Bangladesh Bank (BB).
Demand for lentil is 3,75,000 tons. Local production is 2,24,000 tons. The balance is met by imports. According to the central bank, letter of credit was opened for1,42,000 tons during the period under consideration. LC settlement stood at 1,09,000 tons. This means that there is no shortage of lentil in the country.
The demand for onions is 2.2 million tons. The current year's production is 1.9 million tons. About 4,92,000 tons have been imported. Demand for gram is 60 thousand tons. Local production is 10 thousand tons. Balance 50,000 tons is imported. According to the Bangladesh Bank, letter of credit has been settled for 1,22,000 tons during the period under review.
Demand for dates is 5,000 tons. About 13,000 tons are required for Ramadan. According to the NBR, 17,000 tons have been imported into the country. Demand for garlic is 5,27,000 tons. Local production is 4,39,000 tons. Balance is imported.
The total demand for sugar stands at 1.3/1.4 million tons. There is a stock of 1,50,000 tons in the Sugar Mills Corporation. According to the BB, letter of credit has been opened for 1.59 million tons. LC has been settled for 9,20,000 tons.
The commerce minister has said that stocks and supply of all essential commodities are adequate. There is no reason for the market to be heated up. But there is news of price rise in Chittagong and Dhaka. Price of lentil, sugar, onions, gram etc is going up in Chittagong. This is also happening in Dhaka. But there is no report of international price of these items going up.
The grains of gram have registered a price increase of Tk 20/25 per kg last week. Due to Shab-e-Barat, the ministry of commerce is saying that stock of gram is more than enough. Syndicates are trying to earn a few thousand million taka on the occasion of Shab-e-Barat. Prices of spices have gone up by Tk 5/15 per kg. the ministry of commerce have sent instructions to districts to guard against price increase.
The ministry of commerce is holding regular meetings with importers and wholesalers. Businessmen are making promises in those meetings but such promises are not reflected in the market. Monitoring teams will also be fielded in the market. Based on past experience, it is feared that another price rise will tale place at the advent of Ramadan.
The writer is an economist and columnist.
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