Erratic kitchen markets

Defying all common theories of   economics, the kitchen market is behaving erratically in recent days with prices of essential items going beyond the reach of the citizens. Prices of different varieties of rice, pulses (lentil), cooking oil, spices, sugar, chicken, fish, egg etc., required on a daily basis, keep rising for no plausible reason thereby upsetting the family food budget of the people who live on fixed income. Such unpredictability of the kitchen markets often puts a family man into an embarrassing situation when his budget for the entire month dries up by the 20th of the current month. Rice price remains a decisive factor in this narrative as this commodity is required by a family daily as the staple.  

A detailed report on the pertinent issue in this daily on Friday says that the government’s move to tame the rice price did not yield the desired result as traders remain sluggish to the call for import of rice. With a view to bringing stability in the rice market, the food ministry took the decision in early August to import 16.93 lakh tonnes of rice but because of the lack of interest of the importers, the supply dwindled and as a result prices of various types of rice started to go upward since then. To further facilitate the traders, taking their financial investment  into consideration, the duty on imported rice has been reduced to 25 per cent from the previous 62.5 per cent . But it seems that the government did not act to motivate importers either.

 Our report shows that so far Letter of Credit has been opened only for 4.63 lakh tonnes while the deadline for import expires on 25 September, 2021. This however needs to be mentioned that over 84 thousand tonnes of rice has been imported by traders as of 21 September. When the country needs about one lakh tonnes of rice per day to feed the entire population, rice millers and traders are in doubt what impact import of about 17 lakh tonnes will have on the market.             

It is common knowledge that some powerful people create strong syndicates to control prices of essential provisions and thereby make millions overnight. They keep the wholesale markets across the country in their iron grip and accordingly settle the prices of essentials on a daily basis. It appears that no power or authority can break these rock solid syndicates. They play around with local produces as well as imported commodities as members of the closely guarded syndicates. In this connection, we may cite the example of skyrocketing onion prices in 2019 and the resulting chaos and suffering of the common people in the country. The price had shot upto Tk 300 a kilo in the local kitchen markets immediately after India had imposed a ban on its exports. But before the ban on Indian export, locally grown onions were selling at about Tk 35 a kilo in the open market. Interestingly, live Television footage showed sacks of onions in the warehouses of big importers decomposing despite big demand in the markets.

However, rising to the occasion, Bangladesh Trade and Tariff Commission (BTTC) had suggested the government should import onions from alternative sources like Myanmar, Afghanistan, Egypt, Turkey, China, Malaysia, Pakistan and the Netherlands to avert the crisis. And on its part, the central bank had issued instructions to commercial banks to charge a minimum margin for opening Letters of Credit for importing onions in a bid to help control the galloping prices.

As for other items, prices of essential commodities are showing an upward trend since January this year. Cooking oil, sugar, pulses (Masur) and vegetables saw a sharp rise in the recent months. Consumers believe that once the price of a commodity goes up it never comes down. Economists and market watchers are of the opinion that because of the veritable lack of strict monitoring by the authorities concerned, the wholesalers and retailers keep increasing prices of necessities under one pretext or another. Therefore, to stabilise the kitchen markets the government should ensure regular visits by competent officials and identify elements who work from behind to create chaos in the markets.