Massive area-based discrepancies in commodity prices: WFP

Wide variations in the prices of edible oil and garlic were seen at the consumer level in different locations in Bangladesh in August, according to Bangladesh market monitor report of the World Food Programme (WFP).

The report titled “Bangladesh Market Monitor August 2022” was published by WFP on October 13.

The highest difference was observed in the retail price of imported garlic which was sold for Tk 115 per kg in Sylhet and for Tk 181 per kg in Chattogram. The price difference for the same item was Tk 66 in these two divisions in August.

In the case of palm oil, the difference was Tk 25. The retail price of palm oil per litre was Tk 132 in Rajshahi, but Tk 157 in Sylhet.

Similarly, soybean oil retailed at Tk 169 per kg in Rajshahi, but Tk 185 in Sylhet, with a Tk 16 price difference.

The monitoring report also revealed the picture of selling at prices higher than the price set by the government. As edible oil is a daily essential commodity, the commerce ministry determines its retail price.

On August 22, the government issued a notification fixing the price of per litre of soybean oil at Tk 175 and palm oil at Tk 145. However, WFP’s report shows that both palm oil and soybean oil were sold at higher prices in some places in the country.

According to market analysts, due to the lack of efficiency and effectiveness of the market monitoring by the government, traders are asking for whatever price they can from the consumers. In the end, it is the consumers who are suffering.

Regarding market monitoring, the Consumers Association of Bangladesh (CAB) Vice President SM Nazer Hossain said that the government has not yet been able to establish a proper market monitoring system.

“When there is a commodity crisis, the government deals with it for the time being. But market monitoring should be a regular process taking measures before the crisis occurs so that unscrupulous traders cannot make excessive profits using dirty tricks,” Nazer Hossain said.

“It can be said that the government has left the issue of consumer goods in the hands of traders. Therefore, the traders of each area are making huge profits by fooling the consumers. That is why the price of the same commodity is also varying from place to place,” he added.

Mentioning that no traders have received any significant punishment for market manipulation so far, the CAB vice-president said, “Punishments should be dealt with to bring about a change in the situation.”

In some cases, the government itself creates the chance to make extra profits, Nazer Hossain said.

“For example, the price of palm oil in Khatunganj wholesale market was already Tk 15 less than the price set by the government. Here, the government legally provided traders with the chance to make a big profit,” he said.

Admitting that the price of edible oils fixed by the government was higher than the market price at that time, Directorate of National Consumers’ Right Protection (DNCRP) Director General AHM Shafiquzzaman said, “In the case of edible oil, we determine the maximum retail price. We monitor whether someone is selling at a higher price than the MRP. When we get such news, we conduct a drive and take legal action.”

However, Shafiquzzaman said that he was not aware of the area-based price discrepancies in commodity prices as shown in the WFP report.

The WFP report also showed area-based discrepancies in retail prices of several other commodities, such as Tk 4.5 per kg of coarse rice, Tk 6 per kg of potato, Tk 9 per kg of broiler chicken, and Tk 5 per kg of flour.

Regarding price hikes, the report showed that from August 2021 to August 2022, the price of coarse rice increased by 6.4 per cent, palm oil by 21 per cent, potato by 31.6 per cent, broiler chicken by 31 per cent, sugar by 15.9 per cent, imported red lentil by 33.7 per cent, soybean by 36.1 per cent, eggs 25.5 per cent, and imported garlic by 20.1 per cent. The highest 47.3 per cent increase was seen in the price of wheat flour.

According to WFP, although in August 2022 most essential food prices in global markets saw a downward trend, the effect of the decline has yet to be seen in Bangladesh’s domestic markets.

Supply chain constraints on import and the currency devaluation against USD have kept prices of imported goods such as edible oil, lentils, and poultry feed high since July, read the report.