Shahiduzzaman Khan

Of late, Prime Minister Sheikh Hasina made a fervent call to the country's businessmen not to charge too high prices for the essential commodities in this month of holy Ramadan. Her call followed widespread instability in the prices of some essentials in the kitchen and Iftar markets.

Indeed, a volatile situation persists in the city's kitchen market now. There is no logical ground behind such abnormal price-hike as there is sufficient stock of soybean oil, sugar, onion etc., in government godowns and retail markets. But why the prices of these commodities have been jumping everyday is a matter of serious concern. There is no valid reason as to why the consumers should pay Tk 160 for a kilogram (kg) of green chili and Tk 80 for a kg of aubergine. The prices of these commodities were Tk 50 and Tk 30 per kg respectively before the advent of Ramadan.

Reports say two ministers came down heavily on businessmen this week for the soaring prices of essentials. After an inter-ministerial meeting on revenue stamps at the ministry of finance (MoF), Finance Minister AMA Muhith told reporters that the government was deeply embarrassed at the activities of 'syndicates' who were manipulating the prices of essentials. He urged the consumers to be vocal against a coterie -- a few unscrupulous business people.

On the other hand, Commerce Minister Faruk Khan blasted the businessmen for not being honest with their profession. Addressing the launching ceremony of a journal at the National Press Club, Faruk said he is in a dilemma over what to do since a drive by the past caretaker government against unscrupulous businessmen had ended in untold sufferings of the people. Some essential commodities had vanished from the market and the supply of some items was scanty as well at that time. But as of now, there is no supply-side constraint and it is evident that a section of dishonest businessmen in a bid to maximise their profit are increasing commodity prices.

On their part, businesses are engaged in foul 'blame game' playing. Retailers say the wholesalers are responsible for the price hike while the wholesalers point their fingers to the retailers. This is happening over the years.

The commerce minister candidly explained the reason why stringent measures are not being taken against the unscrupulous traders. He said: "If we act tough on unscrupulous businessmen, they will discontinue import and stop business, resulting in a crisis of commodities in the market. For example, if action is taken against the traders selling aubergine at Tk 60 per kg which should actually cost Tk 20-Tk 40, you won't find any aubergine in the market," he said. In the same way, the price of soybean oil should not be over Tk 78 and palm oil over Tk 65 since import prices of these edible oils are Tk 71 and palm oil Tk 57. At present, the country has a stock of 0.25 million tonnes of edible oil.

While the authorities are pondering over how the price spiral can be checked, the government has a number of ways to intervene in the market when such situation arises. In an open-market economy, to which successive governments have subscribed, there is scope for the government to intervene in, and regulate, the market in greater interest of the public. The public perception is that whosoever is in power has an obligation to act and monitor prices, as it is the public that suffers most because of the high prices of the essentials. Following the rise in the prices of potatoes and eggs, the government moved for allowing import of those items. The first consignment of imported eggs is expected to hit the city market later this week. Potato import is also under consideration. Anytime the government may facilitate importation of this essential commodity.

It has been witnessed that when the government moves to facilitate import of any essential item, business associations in question raise a lot of hue and cry. They say the government is 'conspiring' to destroy domestic industries in the name of import. Sometime, they assure the government about lowering the prices of related commodities by opening 'fair price' outlets. Indeed, some outlets were seen selling eggs at Tk 26 per four. But the move failed to cool down the overheated egg market.

Against the backdrop of spiralling prices of essential commodities, the government weighed various options to put a brake on it. The latest is the report of an inter-ministerial committee that recommended taking up legal actions against those involved in jacking up the prices of several essentials commodities. It is not known what are those actions the government is going to take against the 'cartel', that is stated to be, on real or perceived grounds, so strong that no minister or law-enforcing agencies could break it. During the four-party alliance government, one influential minister had to resign over price hike issue. Many people say that known criminals and dishonest hoarders roam around the city scot-free and they term this situation as "puzzling to witness". If the wholesalers and retailers in Kawranbazar, Badamtali or Swarighat are asked, they will reportedly disclose the names of the alleged members of such cartel. Here, the role of the intelligence agencies is important. It may not take so many days for them to unearth the real identities of the cartel members.

The commerce minister and the members of the apex trade body -- FBCCI -- were very often seen going for market surveys. What were the results? Nothing tangible. 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 dishonest sections of the business groups. The government may go for setting up of a price commission that was since long discussed. An inter-ministerial body also recommended for it as such a body has otherwise proved to be effective in some countries of the world.

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szkhan@thefinancialexpress-bd.com