Inflation down, but food prices up!

The price of key essential commodities – including rice, flour, meat, and sugar – rose significantly in the August-October period this year, despite government data showing a decline in food inflation during this three-month period.

According to Bangladesh Bureau of Statistics (BBS) data, the country posted an 11-year highest 9.94 per cent food inflation at the end of August. During that period, the average prices of rice and flour stood at around Tk 57.5 – Tk 113 per kg and Tk 52.5 – Tk 68.5 per kg respectively.

In October, BBS data claimed that food inflation declined to 8.5 per cent. However, market data showed that the prices of rice and flour have actually increased by more than 10 per cent to Tk 58.66 – Tk 125 per kg and Tk 59.25 – Tk 71.75 respectively.

An analysis of the market and price records of 140 food items under 70 categories compiled by the Consumer Association of Bangladesh (CAB), show that the rates of at least 51 per cent food items have gone up between August and October this year.

Prices of 28 per cent of the food items remain unchanged, while the rates of only 20 per cent the food items dropped during this period. Traders too confirm that prices of the majority of kitchen market essentials rose significantly in recent months.

According to the Consumers Association of Bangladesh (CAB), not only rice and flour, but the trend of price increase has been witnessed in nearly all essential food items currently available in the market.

Among the top 20 essential commodities, the prices of at least 15 types of items increased by up to 37 percent in October compared to August.

‘Statistics not reflecting market reality’

According to latest BBS data, Bangladesh’s inflation rate has been declining in last three months. The country’s average inflation rate was the record highest 9.52 per cent at the end of August 2022, while the food inflation was 9.94 per cent.

Inflation rate later dropped to 9.10 per cent, while food inflation to 9.08 per cent in September. At the end of October, BBS posted 8.91 per cent average inflation rate, and 8.50 percent food inflation rate.

CAB data shows that the average price of fine rice was Tk 123.33 per kg in August, but it rose by 10.29 per cent to Tk 125 per kg in October. The price of coarse rice was at Tk 57.5 per kg in August, which rose by 2 per cent to Tk 58.66 per kg in October.

The price of medium rice was Tk78.5 per kg in August, and it rose by 1.27 per cent to Tk 79.5 per kg on October.

On August the average price of atta was at Tk52.5 per kg, which increased by 12.86 per cent to Tk 59.25 per kg on October. The price of maida rose by 4.74 per cent to Tk 71.75 from at Tk 68.5 per kg.

The price of sugar increased the most by 37.50 per cent during this time. Sugar was being sold at Tk 80 per kg in August, but rates increased to Tk 110 per kg in October.

During this period, on average, the price of lentil increased by 2.7 per cent, chickpea 2.86 per cent, chicken 9.5 per cent, powdered milk 8.44 per cent, onion 17 per cent, ginger 70 per cent, garlic 4.55 per cent, fish 5.54 per cent, vegetable 33 per cent, seasonal fruit 98.45 per cent.

The prices of bread, liquid milk, beef, potato, and some food items remained unchanged between August and October. Meanwhile the prices of egg, palm oil, soybean oil, broiler chicken, soft drinks and some others food items dropped in the three-month period.

Mustafizur Rahman, a trader at Segunbagicha kitchen market, said, “I do not see any reduction in the prices of majority food items, including rice, lentil, flour, onion, garlic. The prices of almost everything are going up.

“Prices of edible oil and pulses fell slightly last month for some days, but rose again. The supply of many products has decreased, and our sales have also decreased due to the trend abnormal price hikes.”

Mustafizur says he has no clue how the government came into the conclusion that food prices are dropping. It should be noted that the prices of broiler chicken and soybean oil have dropped a bit in the last three months.

Speaking to The Business Post, CAB President Golam Rahman said, “I have a suspicion that the government’s calculations about inflation are incorrect. I do not think the government statistics reflect the market reality experienced by the low and middle people.

“The price pressure of market commodities appears to be higher than the BBS figures. If the BBS is under-reporting market data, then the issue may create complications in the future.”