Rein in commodity prices

According to a recent report published in this newspaper, essential commodity prices have become volatile again. In recent days, the prices of flour have increased by Tk 12-25 per kg. Retailers are saying that flour prices had risen sharply following the start of the Russia-Ukraine war and India’s suspension of wheat exports. However, in one week prices have increased much higher than before the report adds. Not only the price of flour, but prices of sugar and other daily commodities are also increasing much to the distress of the consumers.

A few days back, edible oil refiners increased the price of soybean and palm oil up to Tk 9 per litre. Meanwhile, the price of sugar has increased by Tk 5-7 per kg and the retailers said that it may increase more in a day or two.

According to experts the main reason for the spike in the price of all commodities in this phase is the price hike in the world market. This argument has been repeatedly raised by the government. Traders also say that shipping costs have gone up along with rising prices in the world market. Bangladesh's Gini coefficient, a measure of statistical dispersion intended to represent income inequality or wealth inequality within a nation or a social group, rose from 0.458 in 2010 to 0.482 in 2016. The richest 5 per cent shared nearly 30 per cent of the national income in 2016, while the poorest 5 per cent shared less than 0.3 per cent of the national income, according to the National Human Development Report 2021 released in January 2022.

Most parts of the world are going through a severe crisis due to the rising prices of food commodities, war, and poverty. Experts say that incidences of famine may increase around the world. In the meantime, the number of hungry people has increased in many countries worldwide. In many countries, food prices have skyrocketed.

In an ideal situation, it is the market that dictates the price. If commodity prices increase because of market factors it is acceptable. However simple economics of demand and supply is often not what is at work here. It is often not an issue of supply and demand but rather cheating the consumer. Unfortunately in Bangladesh syndicates or nexuses are deeply involved in market manipulation.

All concerned, including the government, need to be vigilant so that any kind of crops, fruits, vegetables, etc. are not wasted due to supply and marketing problems. One class of traders raises prices by stocking food in case of disaster. That's not only unethical but illegal as well. Therefore, the government needs to be aware of hoarding. The government needs to monitor the situation so that traders do not increase prices indiscriminately. Bangladesh’s road to LDC graduation and economic prosperity will be a lot rougher if a lion’s share of the country’s people becomes unable to afford three square meals a day.

The government must take effective measures as soon as possible to rein in skyrocketing rice prices, such as offering greater policy support and incentives to importers and ensuring strict surveillance to curb hoarding and price gouging by market manipulators.

Controlling high prices requires comprehensive policy measures. This is all the more important because inflationary pressure will not wither away soon—nationally or globally. If not addressed immediately through appropriate measures, inequality will widen further in Bangladesh. The government will have to adopt a holistic approach to deal with this crisis.

Civil society needs to call on the government to keep prices as low as possible. In general, all concerned, including the government, need to pay attention to ensure that everything is kept at an affordable price for all classes of people. In addition, the government needs to make special plans and initiatives to deal with this adverse situation. It should be ensured that the poor and t the middle class do not fall into financial crisis.