Rising prices of essentials

Dhaka,  Sat,  23 September 2017
Published : 11 Aug 2017, 19:39:51

Rising prices of essentials

Syed Jamaluddin
Prices of essentials are rising by leaps and bounds. Onions have become pricier in the markets of the capital by Tk 15 to Tk 20 a kg in one week alone. Last week, it sold at Tk 22 per kg at Khatunganj of Chittagong. Khatunganj is the biggest wholesale market of the country. Now it is selling at Tk 36 per kg. Market specialists say traders are raising prices on cooked-up grounds before Eid-ul-Azha. Consumers are calling for strict market monitoring. Because of recent floods and bad roads, onions have not reached arats (wholesale markets). Some traders have opened letters of credit for importing onions from Pakistan. This essential will reach Bangladesh before Eid. It was observed last Monday that at Shyambazar, Kawran Bazar, Shantinagar and Fakirapul that local variety of onions was selling at Tk 50 to Tk 55 per kg and the Indian onions were selling at Tk40/45. Water has entered the arats of Chittagong and the onions have been rotten.

The current year began with rising prices of rice. Gradually it went beyond the reach of low-income group. Price of per kg coarse rice went up to almost Tk 50. Millers and traders manipulated the price hike. In March, coarse rice was selling at Tk 44/45.  

Towards the end of the month, there was early flood and paddy was under water. At this time, information on low stocks in government godowns came out in the open. Seizing the opportunity, millers and traders increased price of rice. The price of course rice was selling at Tk 48 per kg. In June, the price rose from Tk 48 to Tk 50.

In order to reduce rice prices, the government lowered import duty on rice from 28 per cent to 10 per cent. It  thought that if import increased in the private sector, prices would come down. But suddenly prices increased by US$30/40 per ton in India. As a result, although there were imports from India, it did not have any impact on the rice market. There is no crisis of rice in the market. But the staple is in the hands of traders. The government will have to take measures to bring the rice from traders to the market. Import alone will not solve the problem. The Ministry of Food seems to be lacking in foresight.

Because of rain, prices of vegetables have gone up by Tk 30 per kg. Spices have also become pricey ahead of Eid. Potato is now selling at Tk 25 per kg as against Tk 20 in last week. Price pf papaya is Tk 40 per kg. Brinjal has shot up to Tk 70 a kg. Karala is selling at Tk 70/80 rising from Tk 50 per kg. Mung dal is beyond the reach of the poor. This item is selling at Tk120/130 per kg. Masur dal is selling at Tk 125 per kg. Meat has gone up to Tk 500 from Tk 480 a kg. Goat meat has risen up to Tk 750 from Tk 700. 

No government agency has taken any effective step to control prices. The Commerce Minister did not admit  allegation of market manipulation and said prices of various items are not beyond the purchasing power of the consumers. The Commerce Ministry is alert about protecting the interest of the consumers, he said adding the markets will be stable during Eid festival. He said  everything is normal.

Due to lack of purchasing power, people below poverty line can not buy nutritious items such as fish, meat, eggs and milk. They are also not in a position to buy vegetables now. It is our pride that poverty has been reduced but it is a matter of concern that the gap between the rich and the poor is increasing. The rich are building up their fortunes through tax fraud, bank loan default and money laundering. It is being said that along with rise in prices, incomes of the common people have also increased. Economists are of the view that wages have increased in specific sectors. Overall wage level has not increased. Wages of agricultural labour have not increased much. Agriculture-related work is seasonal. Price of food items should be kept within the reach of the poor and ultra poor.

The government is under pressure because of rice price situation. The Food Minister has said there is plenty of stocks of rice. Rice is being imported from abroad. One official has said that rice price will not fall until Aman crop is harvested in Agrahayan which will come after four months. With a fall in stocks, the government cannot operate open market sale of rice. 

When import duty of 28 per cent on rice was reduced to 10 per cent, India immediately raised the price of rice. This is one of the reasons why prices did not come down. The Food Ministry has sent a letter to the National Board of Revenue (NBR) to withdraw the remaining duty on import of rice. On the other hand, procurement of Boro rice is not receiving good response.

There is a bumper production of potato in the country. This is stored in more than four hundred cold storages. The government can distribute potato among the distressed. 

This will help reduce the price of rice. The Cold Storage Association feels that if the government takes a positive decision in this regard, the farmers will get a fair price for their products.

The writer is an economist.


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