Ominous signs in the commodity market

The sharp rise in prices of essential commodities has made life difficult for every section of the society across the country, with people finding it hard to manage their household budgets. The commodity market has been increasingly unstable in recent months, with prices of some essential items going through the roof. The situation took a turn for the worse since Ramadan. However, things have not improved after Eid. On the contrary, the commodity market has witnessed increased volatility in the last few weeks.

Even after raising the price of edible oils, the essential item remains elusive for many consumers. And even the newly fixed price is not being followed by many traders. The double whammy came when India suddenly stopped the export of wheat. Despite having abundant stock and supply, there was an instantaneous hike in wheat prices. Simultaneously, there has been an unexpected rise in the prices of a number of essential commodities. A report published in The Business Post on Tuesday identified five essential items– eggs, milk, red lentils, wheat flour and onions–which have become dearer. For instance, in the retail market, a dozen eggs now cost at least Tk 120, or nearly Tk 140 in some places. On average, a consumer has to pay 4 per cent higher to buy eggs now from a week earlier, according to data from the Trading Corporation of Bangladesh (TCB). Interestingly researchers say that the prices of essential commodities are higher in Bangladesh than the international average prices.

Some stakeholders have confidently stated that the prices of the commodities will come down. However, there is little reason to believe that these statements will reassure the hapless consumers. They have had their fingers burnt far too often by commodity market caprices in the past. There is a propensity among unscrupulous Bangladeshi traders to increase the prices of goods under any pretext and use every opportunity. And once prices of essentials increase, they rarely come down to their previous levels. Opportunistic business syndicates rule the roost, and the authorities usually fail to restrain them.

As the war in Ukraine began, discussions about how it may have repercussions on the world economy became a media staple. And this was immediately taken up by a section of unscrupulous traders to raise the prices of their products. While India’s ban on wheat export was unexpected, experts feel there was no plausible reason behind the sudden hike in wheat price.

It would hardly be an exaggeration to say that unscrupulous traders often neglect the simple basics of consumer rights. However, we admit that prices of all daily essentials are climbing in the international market, and the import costs are going up because of the high dollar rate. On the other hand, there are strong reasons to believe factors other than market forces are at play here.

We have observed a perennial lack of coordinated monitoring and drives by the authorities concerned to enforce reasonable rates for essential commodities. The edible oil fiasco revealed that many unethical traders had hoarded the oil to sell them later at higher rates.

As portrayed by the media, signs of public dissatisfaction over spiralling prices are ample proof that the middle and the lower middle class are struggling to cope with the caprice of the commodity market.

The authorities concerned must take stock of the situation and take steps to ease the pressure on the masses. The government should enhance the volume of essential commodities sold through the open market system. The distribution of these commodities must be managed effectively so that the eligible people have access to these items.

In thinking long term, Bangladesh must minimise its dependence on imports. Easier said than done; however the fallouts of export dependency are clear to all. The rapid fall of the value of taka against the dollar has is a cause of the price hike of essential commodities. This is an issue that the authorities must address. There are genuine reasons behind the phenomenon, but a balance has to be struck.