Soaring prices sapped consumers

Shakhawat Hossain /newagebd.net 

Abnormal price hike of daily essentials, from rice to garlic and salt to onion, remained a matter of worry for the consumers throughout the outgoing year, with traders and importers making whatever they could out of the situation amid allegations of lapses in monitoring by the government agencies concerned.

Rights activists and market experts summed up 2017 as a ‘horrible one’ from the point of view of consumers, especially the fixed and low income groups, because of 30 per cent hike in price of rice and over 200 per cent increase in price of onion in one year in addition to seasonal price hike of salt, spices, garlic, edible oils and government regulated gas and power prices. 

The upshot of price volatility in local commodities market left over 50 per cent of the country’s population living on less than $3 dollar income to struggle most part the year for buying food items that accounts 70 per cent of their daily income.

At least 5.2 lakh people have fallen into poverty because of rice price hike which has also caused a rise in head count poverty rate by 0.32 percentage points in the past few months in the country, according to a study of South Asian Network on Economic Modelling released on December 23. 

Consumers Association of Bangladesh general secretary Humayun Kabir Bhuiyan said that the state-owned monitoring agencies could not fulfil the expectation of the consumers in checking the price hike of essentials, often caused by market manipulation by vested quarters.

‘Consumers were simply frustrated and hapless as market did not function properly,’ he told New Age while making a brief assessment of the outgoing year.

Volatility in price of essentials, first time since the previous food price shock during the military-backed caretaker administration in 2007-08, was created basically in absence of proper monitoring by state-owned agencies, he said.

Lack of proper monitoring enabled many traders to make windfall profits during the passing year at the cost of consumers.

Commerce minister Tofail Ahmed, who is facing severe criticisms following price hike of essential commodities, said on December 21 that 14 state-owned agencies were monitoring the local markets.

Tightening monitoring on buying and selling price of imported products might lead to adverse situation, he claimed while talking to reporters on price hike at his secretariat office.

He explained that traders’ associations were very powerful and might stop selling products.

According to state-run Trading Cooperation of Bangladesh, onion was selling at Tk 120 a kilogram in December, marking 206.67 per cent increase from a year ago.

The price of imported garlic recorded a 64.29 per cent rise to Tk 360 from Tk 220 during June, but more than 30 per cent rise in price of rice since August because of supply shortage amid losses of crop to prolonged floods was most tormenting for three quarters of the population.

Tawfiqul Islam Khan, a researcher at Centre for Policy Dialogue, said that the low-income and fixed income groups spending bulk of their income on food items were main victims of food price shocks in the outgoing year.

The groups have to compromise with expenses on medical and education to make up the higher cost of foods, he noted. 

He criticised as belated moves the steps of importing 15 lakh tonnes of rice by the Ministry of Food against the backdrop of falling food reserve in the public depots.

Besides, reduction of import duty on rice from 28 per cent to only two per cent by the revenue board could not save the consumers from the exorbitant rice price hike that pushed up the monthly inflation in September to 6.12 per cent that according to the Bangladesh Bureau of Statistic was 23 months high, compared to 6.19 per cent in October 2015.

Former executive director of Bangladesh Institute of Development Studies MK Mujeri observed that consumers’ suffering would continue if the state-owned monitoring agencies failed to function properly.

He said the consumers did not see any activities from the Competition Commission that was established in 2016.

Amid demand from many quarters the government passed a bill in parliament in 2012 and established the Competition Commission to ensure fair trade practices and check artificial price hike of commodities, a common phenomenon in a country like Bangladesh where traders and businessmen crowd the leading political parties.

The presence of businessmen-turned-politicians in parliament almost doubled to 64 per cent in 2008 from 34 per cent in 1979, according to findings of Transparency International of Bangladesh in 2014.

The commerce ministry officials alleged that bureaucratic exercise in providing manpower was the main obstacle for Competition Commission to start full-fledge operation.

Experts are doubtful stability will come to the volatile commodities market in coming months against the backdrop of poor monitoring by the state-owned agencies.

They note that keeping price of essentials at a tolerable level for majority of population will be the challenge for the government in the new-year.