Prices of commodities have declined gradually in the global market in recent times but it did not bring relief to consumers, mostly those from middle and lower-middle-income groups, in Bangladesh as daily essentials are still costly in the domestic market.
An analysis of the global prices of commodities wheat and edible oil showed that prices of these declined from 24 per cent to 46 per cent in June year-on-year.
But the country’s middle-class people with limited income are continuing to suffer due to the rising commodity prices amid spiralling inflation. People had hoped that their woes would ease once the global prices fall and are reflected in the local rates. But that has not happened yet.
Local traders are holding onto unreasonable extra profit strategies by blaming various domestic and foreign crises. They have said that the increase in the prices of dollars, gas and electricity did not allow the commodity prices to fall in line with the global rates.
Besides, the prices of products also increased due to reduced competition and supply crisis in the local market, they claimed.
Previously, the prices of daily necessities in the international market had hit a record high due to the Covid-19 pandemic and the Russia-Ukraine war, which also resulted in price hikes of almost all products in Bangladesh at an abnormal rate.
Over the last year, the prices of most products in the global market have eventually decreased, but Bangladesh is still walking in the opposite direction.
In the local market, the additional prices did not decrease. Instead, the prices of some products increased further and adversely affected people of all classes and professions.
Although the Russia-Ukraine war has been cited as the main reason for price hikes in the global market, the Consumers Association of Bangladesh (CAB) has practically blamed the ill strategies of the traders for spiralling local commodity prices.
In the past year, the prices of import-based products including wheat and edible oil have decreased from 24-46 per cent in the global market.
But in the domestic market, the prices of flour went up by 2-20 per cent and the prices of edible oil decreased by 3-11 per cent.
Although the prices of sugar have increased by 28 per cent in the world market, it has increased by 66 per cent in the country.
Such a wide difference between the prices of international and domestic commodity markets has been found through an analysis of the World Bank's Commodity Price Data and Trading Corporation of Bangladesh’s (TCB) commodity price data.
The comparison between the international prices and the local retail prices of eight major consumer goods — soybean oil, palm oil, sugar, wheat for making flour and flour, onion, garlic and ginger — showed huge differences.
According to WB data, the average prices of soybean oil were $1,887, palm oil $1,634, wheat $415 and $492, and sugar 43 cents in the global market from April to June in the past year.
Besides, in June this year, the prices of soybean oil in the global market decreased by $1,007, palm oil by $817, wheat by $257 and $345, and sugar by 54 cents.
However, the picture is quite the opposite in the domestic market.
According to TCB’s market data from last Sunday, the price has decreased by only 4 per cent in the last year and every litre of bottled soybean oil was being sold at Tk 175-180. A litre of palm oil was being sold at Tk 120-125 as the prices fell by 10 per cent.
Meanwhile, the prices of flour have risen by up to 20 per cent in a year. Loose flour was being sold at Tk 50-52 per kg and packaged flour at Tk 55-60 per kg. Corn flour prices also increased by 2.27 per cent year-on-year and are now available at Tk 65-70.
The price of sugar has also increased by 66.67 per cent in a year and was being sold at Tk 130-140 per kg.
The prices of import-based commodities, such as onion, garlic and ginger, have increased abnormally in a year.
Showing a 47 per cent price hike, per kg local onion is available at Tk 60-65 and imported onion at Tk 40-45. Garlic prices have also gone up by 100 per cent. Currently, domestic garlic is available at Tk 120-180 and imported garlic at Tk 200-220 per kg.
The prices of domestic ginger and imported ginger have increased by 188 per cent and 100 per cent, respectively. Now, domestic ginger costs Tk 350-400 per kg and imported ginger Tk 150-250.
Yet most of these products are imported from India. According to data from Indian media and online commodity market research institute, last year's average onion exports from India cost Rs 28 per kg and it's now Rs 18 — marking a 35.72 per cent decrease in a year.
Last year, India exported garlic at Rs 74 per kg but now it is exporting at Rs 64.50 per kg, posting a 13 per cent drop.
On the other hand, the prices of these products have increased in the local market.
From September 2022 to February 2023, ginger was imported at an average rate of $311 per tonne, which is the lowest price of ginger exported from India during this period.
At that time, India exported ginger to the US at $4,032 per tonne. Although Bangladeshi traders imported ginger from India at a low price, they sold it in the domestic market at a much higher rate compared to the average international price.
Earlier this month, CAB alleged that although the prices of products in the world market have fallen, the country gained no benefits due to dishonest traders.
These syndicates are looting huge amounts of money from the pockets of consumers by creating a supply crisis of daily commodities, CAB claimed.
CAB President Ghulam Rahman said that the local prices are increasing instead of dropping even though the global rates have fallen. Some local business firms are making exorbitant profits by controlling the supply of almost every commodity.
“Due to the lack of competition in the market, these companies are making abnormal profits by fixing the prices and controlling the supply of products. Sometimes they are creating supply crisis of edible oil, sometimes sugar or onion or ginger and looting people’s money,” he said.
Biswajit Saha, director of City Group, told The Business Post that while the global prices fell fallen over the past year, the dollar price in the country's market rose by 35 per cent, gas price by 300 per cent, power tariff by 50 per cent, and transportation cost by 40 per cent at the same time.
Due to all these reasons, it is hardly possible to sell products at a lower price at the same rate as the international market, he said.
“Traders are failing to open LCs due to the dollar crisis, leading to lesser imports than required. Banks take a 100 per cent margin and double interest in case of LC opening.
“Moreover, the shipping charges for imported goods have increased significantly. Due to all these reasons, the prices of daily commodities are not falling,” he said.
