Commodity price shocks

Soaring commodity prices keep eroding the purchasing powers of consumers. Each and every item in the kitchen market is spiralling, and going beyond the financial capacity of buyers. While the official inflation figure of the government is close to six per cent, a local think-tank called SANEM last week calculated the inflation above double the figure of the Bangladesh Bureau of Statistics. Supply disruption, cost escalation in importing countries, and a monopolistic attitude of a section of greedy traders made the prices of essential items go beyond the reach of common people. Key food items like edible oil, wheat, and beef hit an all-time high. Ahead of Ramadan, to fix the volatility in the market, serious attention from the government is needed, and ethical business practice is essential for all types of businesspersons.

According to a report published in this daily on Sunday, soybean scarcity hit Bangladesh, as the major cooking ingredient has mostly disappeared from the shelves of both retail and super shops. The edible oil supply has also dried out on online platforms, making it impossible for consumers to order it. Loose soybean oil is now even scarcer than the bottled variety. The Trading Corporation of Bangladesh (TCB) on its website on Saturday announced that it could not find any loose soybean oil for sale in the market, so they could not publish prices for this particular commodity. The picture is equally disturbing and depressing.

Online grocery shops have been hit by soybean scarcity as well. Chaldal.com – the country’s largest e-platform for groceries – usually sells 200-300 tonnes of soybean oil every month, and 80-90 tonnes per week. This platform sold four tonnes of soybean oil last week, and at the moment, the commodity is out of stock there as well. Chaldal.com’s CEO Wasim Alam said, “We usually keep enough stock of the soybean oil to cover consumer demand. But we ran out of stock due to the ongoing shortage. We have been facing this issue since last week. No one has a stock of soybean oil. Daraz – another large e-commerce platform – also sells soybean oil, but it is out of stock there as well. The situation is similar in super shops such as Shwapno and Agora. Their websites are no longer taking online orders for soybean oil, and outlets cannot say when it will be available. According to a TCB list, on Saturday, the prices of per litre loose palm oil was Tk 155 – Tk 158, palm super Tk 160 – Tk 163, and bottled Tk 165 – Tk 170.

Besides soybean, wheat prices are also on the rise. Coupled with the price hike in the global market and India as well, prices of imported wheat increased by Tk. 130 to Tk 200 per maund in the country’s wholesale and retail markets.

As stated by industry insiders, the demands and prices of wheat went up as the ongoing Russia-Ukraine crisis caused supply disruption. According to the wholesalers, per maund of Indian wheat is sold at Tk 1,240 and Canadian one at Tk 1,860 at the Khatunganj wholesale market in Chattogram. According to reports of several Indian media outlets, prices per tonne of wheat rose by Rs 4,000 to Rs 25,450 in the last couple of weeks. Within a week, prices of packed flour have increased by Tk 5 for one kg packets and by Tk 8-10 for 2 kg packets in the market.

Fifty kg sack of flour (maida) is now being sold at Tk 2,400 which was Tk 2,300 to Tk 2,350 a few days ago.

Currently, loose flour (atta) per kg is being sold at Tk 35 to Tk 38 which was Tk 33 to Tk 34 a few days ago. Meanwhile, as per the data of the Ministry of Food, there are about 2.25 lakh tonnes of wheat in its warehouses. The hard-pressed consumers and commoners are in distress now. Selling out a small number of food items through the TCB outlets alone cannot cater to the need of crores of people in the country.