Trade
4 years ago

Rising onion beats past record

Low- and middle-income groups hit hard

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Prices of most essential commodities, including rice, flour, onion, garlic, sugar, lentil as well as vegetables, continued to soar over the last two months, burning a hole in the pocket of low- and middle-income groups.

The price hikes ranged between 4.0 and 400 per cent during the period, according to the Trading Corporation of Bangladesh (TCB) and the Department of Agricultural Marketing (DAM).

Of the items, onion has surpassed all past records in terms of price hike. On Tuesday, the spice was retailing at Tk 200-Tk 260 a kg depending on quality in most city markets.

Its prices registered an increase of 271 to 400 per cent in the last two months.

The current onion prices are 433 to 450 per cent higher than a year earlier, according to TCB.

Market insiders said there are enough stocks of essentials in the country, but some unscrupulous importers and traders have created profit-mongering syndicates that were charging extra for the items.

And all efforts taken by the government to bring stability in the market seem to be futile, they said.

The volatility in the onion market began since neighbouring India imposed a ban on the export of the item on October 28 last.

"To cash in on the export ban, local importers, big traders and their allied hoarders raised the prices by 70-100 per cent overnight," said Consumers Association of Bangladesh (CAB) secretary Humayun Kabir Bhuiyan.

In the absence of proper market monitoring system and harsh punishment, a syndicate took control of the market and set prices at their will, he observed.

He noted that salt market also became volatile for a few days last week amid rumours of short supply.

The syndicate that spread the rumours raked in millions of taka within hours, he said.

However, salt prices became normal soon.

Mr Bhuiyan also said the apathy of the government to ensure a check and balance in the essential market encouraged millers to raise prices of rice and flour, adding woes to the consumers.

The consumers saw rice prices go up by Tk 5.0-7.0 a kg over the last three weeks despite bumper production and low prices of paddy in this Aman harvesting season.

Coarse and medium varieties of rice are now selling at Tk 40-Tk 50 a kg and the finer varieties at Tk 53 to Tk 72 a kg.

Prices of flour, sugar, lentil, edible oil, vegetables, potato, garlic and ginger have also been on the uptrend in recent weeks.

Most vegetables are selling at Tk 40-Tk 130 a kg in this Robi season when they usually remain cheaper.

"This rising trend of prices of essential commodities has been eating up real income of people, especially hitting the limited-income groups hard," said Prof Golam Hafeez Kennedy, vice-president of Bangladesh Agricultural Economists Association.

As a result, daily expenses of day-labourers have increased significantly in the last two months but their earnings remained static at between Tk 350-Tk 500, he said.

Besides, factory workers, lower-middle class and students/jobseekers living in mess and hostels are feeling the heat of the price hike, he added.

Prof Kennedy also said the government has failed on two fronts when it comes to the market volatility.

"Firstly, it has failed to maintain order to help stabilise the market and secondly, market operation of the state-run TCB couldn't make any impact on the price situation," he observed.

The government, however, has taken several measures to rein in prices.

District administrations and the Directorate of National Consumer Rights Protection (DNCRP) carried out random mobile court drives both in Dhaka and Chattogram wholesale and retail markets in the last six weeks.

The government also encouraged some big companies to import onion by air and sea on an urgent basis.

Despite all such efforts, the prices of essentials continued to surge, the official data show.

Meanwhile, the Customs Intelligence and Investigation Directorate (CIID) on Tuesday said they interrogated big onion importers but didn't find any evidence of hoarding onion.

It also said wholesalers and retailers will now be interrogated.

Asked, an official at the National Accounting Wing under the Bangladesh Bureau of Statistics (BBS) told the FE that the surge in rice and flour prices might lead to a further rise in food inflation, as these two items comprise major weights in the consumption basket.

Food inflation increased to 5.49 per cent in October from 5.30 per cent in September while general inflation for the month saw a decline, he said.

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