Soaring food prices

Food price inflation has been rearing its menacing head in recent days, increasing the strain on lower and middle-income people across the country. The lifting of the pandemic gloom has failed to bring solace to the common people with the prices of everyday essentials spiralling. The prices of rice, wheat, edible oil, flour, chicken, fish, red meat, spices, and vegetables have shot up in the kitchen markets. Most essential food items are price inelastic, meaning that an increase in their prices normally doesn’t depress their demand. Despite monetary tightening, this price inelasticity also keeps demand for food items intact — and growing at their natural rate. The increasing price hike of food items has raised valid concerns about the potential escalation in hunger, poverty, and malnutrition. This is especially true for people already within or just outside the poverty bracket.

It must be admitted that the post-pandemic global recovery has sent international commodity markets spiralling across continents because of an imbalance in demand and supply. The increasing oil price in the international market has affected prices in Bangladesh. To that has been added the recent hike in LP gas and fuel prices in the country. However, we believe that the government cannot absolve itself of responsibility by dismissing the hike in domestic prices as a phenomenon of the international commodity cycle. To say that the government remains absolutely insensitive to the people’s problems arising out of such high food inflation would be unjust. But what is obvious to all is that all efforts to contain it have not yielded positive results so far. Government intervention through TCB truck sale of some essentials relieved the woes of lower-income groups of people to some extent. As a matter of fact, people of the middle classes too are often seen queuing up in front of TCB trucks, braving humility and indignation. The sight can be interpreted as an ominous sign for the future. There have been media reports about many families being forced to halve their food intake since the price spiral. The low- and middle-income group are making do with the food price hike by reducing their animal protein intake.

What puzzles most observers is that there is an adequate supply of essential food items. Yet their prices keep on soaring, which has been impacting negatively on the price level of other commodities. According to an agency report carried in this newspaper on Wednesday, the food stock of Bangladesh has reached a new height of 20 lakh tonnes, with warehouses full of rice and wheat. As a matter of fact secure food stock level for the country is 10 lakh tonnes. Despite the reserves food prices are soaring. The report adds that market analysts and food ministry officials are mystified as to why food prices are soaring in the domestic market. However, there are observers who are not so mystified. Food security is not only about having enough food grains. It also includes the proper distribution of food, food availability, and people’s purchasing capacity.

Dishonest traders sometimes take the chance of factors that have nothing to do with the price hike. Profiteer syndicates often create an artificial crisis of essential items to increase prices and multiply profit. Most middlemen claim excessive profit at times, increasing prices of essentials irrationally. There are reasons to believe that even the government policymakers are aware of these manipulations of the traders but have failed to take effective action.

With food price inflation aggravating the troubles of low-middle-income families that are already struggling with a substantial reduction in purchasing power and loss of jobs because of the pandemic, the government’s response has been less than adequate. The government has been unable to reduce the burden of spiking domestic food prices by tackling such local factors as supply disruptions and artificial shortages of essential food items that contribute to the hike in food prices. High food inflation should be a cause of concern for the policymakers since it is detrimental to the well-being of the people and the government’s ambitious growth plans.