Taming unnatural price rise  

Shamsul Huq Zahid       | Published: July 01, 2018 21:41:05

This has become more of a routine phenomenon that when international prices of an essential item remain in a declining trend, Bangladeshi businesses move in the opposite direction. It did happen in the case of edible oils, sugar and pulses in the recent past. Now the traders have chosen rice.

Though the rice exporting countries have reduced their prices considerably following Bangladesh's imposition of 28 per cent duty on rice import in the first week of last month, the prices of the item in the domestic market have gone up.

It was Bangladesh government's desperation to buy a large volume of rice that had prompted some major rice exporting countries to hike rice prices during the last financial year. But the situation has changed radically following the record harvest of two major rice crops and import of a large quantity of rice by both private and public sectors during the just concluded fiscal year.

Two major rice exporting countries---India and Thailand-have already reduced the prices of rice substantially. India is now reportedly wooing China to buy its rice. 

Why should rice prices go up in such a situation? Even the rice traders do not have an appropriate reply to this question.

However, the people who do know how the food cartels operate in Bangladesh, did predict that the ongoing development involving rice prices would surface soon or later.

There is no valid reason/s for rice prices to go up. Yet the item has become costlier within a gap of a couple of weeks.

The import of a huge quantity of rice, more than 3.0 million tonnes, by both private and public sectors, opening of letters of credit for import of another 4.0 million tonnes and bumper production of two major rice crops---Aman and Boro---are supposed to pull down rice prices to a minimum level.

The prices of coarse rice declined, to some extent. But a reverse trend has already begun.

It is worthwhile to mention that the prices of paddy at the growers' level had declined to such a level at the harvesting time of Boro that the farmers could not recover even their cost of production.

Poor farmers would have benefited if they could sell their produce at the government-set procurement prices for paddy and rice. But the government, it seems, does announce the procurement prices to benefit millers, not farmers. The government starts procurement when the produce of farmers is bought and stored in the warehouses of millers.

The import of a huge quantity of rice during the last financial year taking advantage of zero duty facility and the reported entry of some 'new' faces in the rice-import businesses gave indications about something ominous to take place.

The revival of the duty rate to 28 per cent in the national budget for the current financial year following strong plea from ministry concerned to re-impose duty set the stage for the food cartels to hike rice prices.

The new entrants in the rice import business are said to be influential people having strong political connections. They have invested billions of taka with a hope of making handsome profit. They would do their best to achieve their goals.

But the truth is it is the poor who get the raw deal always. When rice prices were down at the harvest-time, poor farmers did fail to recoup even their cost of production. Yet they had to sell their produce at the prevailing low market prices.

Now it is none but the poor would be hit hard by the unjustified hike in rice prices.

It is good that the government has constituted a body called the Bangladesh Competition Commission to encourage fair competition in trade and business through control and prevention of conspiratorial collusion, monopoly, oligopoly and abuse of merger or dominant position. Recently, it has published an advertisement in the print media seeking cooperation from all concerned to help proper growth of trade and commerce in the country.

But the commission must not add yet another lame duck to the regulatory or supervisory entities of the government.

Inaction on the part of the regulatory bodies and relevant others has frustratingly helped irregularities, inefficiencies and other vices to proliferate.

If fair competition could be ensured in the country's trade and business, the consumers would greatly benefit from it. In that event, it would not be possible for businesses to exploit consumers whimsically or the way they want.

However, it is not possible for the Competition Commission alone to ensure all the fairness in trade and businesses unless both the business community and the consumers extend their cooperation to it. The trade promotional bodies could also play an important role in this connection.


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