Munima Sultana

Despite the government's assurances that essential prices would remain stable during the holy month of Ramadan, experts and traders are found to be sceptical.

Traders maintain there exists a gap between demand for, and supply of, essential commodities and the uptrend in prices in recent weeks might persist until the month of Ramadan.

But an economist said in addition to supply situation, the cost of import of essential commodities would play a crucial role in the price situation during the holy month.

Traders said prices of most commodities have already gone up between two to three per cent and predicted that the trend is likely to continue if the government failed to gear up monitoring.

"The government claims that there is enough supply of essentials, but we are not observing that," said Akter Hossain a wholesaler of potato, onion and garlic at AGB Colony.

Commerce Minister Faruk Khan said the government has taken necessary steps to ensure adequate supply of edible oils, pulses, gram, sugar, onion and some other essential commodities for keeping prices of these items stable during the month of Ramadan.

He said measures have been taken by the Trading Corporation of Bangladesh (TCB) to build up enough stock of essentials like edible oil, sugar, pulses. "If necessary, we will take urgent steps to increase supply of other important goods in the coming days," he told the FE.

Mr Faruk said open market sale of essentials would begin across the country from the first week of August through the government-appointed dealers.

Economist Zaidi Sattar said increased supply of goods alone could not ensure price stability. Increased import of a product might have an impact but price behaviour is dependent on costs of import.

Mr Zaidi questioned the capacity of the TCB to intervene in the market to help stabilize prices. He, however, said the government could help attain price-stability by providing subsidy.

"TCB can be used as tool to control market but fulfillment of the objective is still open to doubt," he told this correspondent.

According to the Association of Kitchen Markets and the Consumers Association of Bangladesh (CAB), barring rice, flour and pulse, the prices of all other commodities recorded a rise during the last few months until Sunday.

"The price of onion went up by Tk 10 in a day," said Akter

The half-yearly and monthly reports of the CAB on kitchen market price situation said only the price of soybean declined and that of potato remained unchanged during the last two to three weeks.

However, the commerce minister is confident that the prices of essential commodities would decline during Ramadan.

"I am optimistic about price stability during the holy month of Ramadan," he said.

Regarding unstable prices of eggs, poultry birds and onion, the commerce minister said poor rainfall and bird flu were the major causes for the rise in the prices of these items. He said the government is observing prices of egg, potato and some other items and, if necessary, it might take immediate decision to import those.

Anwar Hossain Sikdar, President of the Association of Dhaka City Fish and Kitchen Market Small Traders, said the prices of essential items could be controlled if the government increased the market monitoring system.

According to CAB, rate of increase in essential prices was 2.29 per cent during January - June period of 2009. The prices of vegetables rose by 4.53 per cent and eggs by 8.23 per cent in June.