The Financial Express

Analysing price spiral during Ramadan

| Updated: April 24, 2018 20:46:36

Evaly and Fianancial Express Evaly and Fianancial Express
Analysing price spiral during Ramadan

Ramadan is knocking at the door. Consumers are hoping for good food at Iftar and Sehri after fasting for the day. They are already counting the extra cost needed for Ramadan. Traders are contemplating for stocking up Ramadan items. Dishonest traders are already stocking consumer goods like rice, lentil, gram, soyabean oil, potato, onions and others to meet the higher demand in the month of Ramadan. Government is gearing up measures to resist stockpiling. With hopes that prices of above items will increase during Ramadan, businessmen have hired new warehouses and are already borrowing money from banks for building stocks of Ramadan items.

In many countries, prices of commodities are reduced during the month of Ramadan to help the population who fast during these times. But in our case, the price goes up. The commerce minister has already warned the businessmen that prices do not go up during Ramadan. An alternative marketing arrangement through Trading Corporation of Bangladesh (TCB) needs to be in place to help the consumers. Government needs to be more active in monitoring.

Rising prices of essentials during Ramadan has become a normal event. Although supply is more than demand, prices go up. But this time, the dishonest traders will not be spared as the government wants to keep the market stable in the election year. As a strategy, stocks of all items have been doubled. Businessmen and business organisations will be under watch. Stern actions will be taken against the accused.

Traders have urged the government to control the transport fares, solve the Chattogram port crisis and stop the depreciation of Taka to arrest the price spiral of basic commodities before and during Ramadan. They have committed not to hike the prices of basic commodities on the occasion of Ramadan. Government was requested to allow goods-laden trucks to ply on the Dhaka streets during day time for the month of Ramadan to ensure steady supply of basic goods.

A section of unscrupulous traders make heavy profit ahead of Ramadan by creating an artificial crisis of basic commodities whose demand swells during this month. To prevent such a situation this year, the commerce minister called upon traders, importers, policemen, secretaries and representatives from government agencies and departments to know about the current stock and price situation of the commodities. The various reasons that affect and lead to the price spiral were found during the discussion.

A trader had said that transport cost has almost doubled over the last three months due to a weight limit in carrying goods by trucks. Now, the same quantity of goods has to be carried in two trucks. This move affected the prices of commodities. Another trader had urged the government to instruct the Chattogram port to release the goods-laden ships on a priority basis so that the importers need not to pay for overstay at the port.

The mill owners were urged to release the goods from the mill gates to wholesale buyers as soon as possible so that there are no delays which go on to impact the prices of goods. At times, wholesale buyers have to wait for as long as three days for the release of goods from the mills even after all settlements. By this time, prices go up due to disruption of supply.

The traders demanded reduction in traffic congestion.

Importers, wholesalers and retailers who attended the meeting with the commerce minister said that they have sufficient stock of gram, onion, sugar, edible oil and lentils. The commerce minister said prices will not only remain stable in Ramadan but also throughout the year. The minister hoped that traders will not create artificial crisis during Ramadan as they are honest businessmen and government have confidence in them.

City's meat traders assured the commerce minister that meat prices would decrease during the month of Ramadan. The govt will take a move for open market sale of key essential items to keep prices within the buying capacity of the common people during Ramadan.

The holding of the meeting at the commerce ministry this year followed the usual pattern of promises about keeping prices stable. While speaking with the media, the commerce minister was optimistic about price stability in the upcoming Ramadan as the supply situation is satisfactory. Still, strict price monitoring is needed at all levels of the supply chain.

On April 15, the Dhaka Chamber of Commerce and Industry called upon the government urging it to reduce import duty on essential commodities and to ensure speedy customs clearance in the ports to keep prices stable during the month of Ramadan. The trade body also stressed the need for streamlining traditional supply chain management, checking stocking, strengthening market monitoring, stopping extortion in transportation sector, reducing excessive traffic congestion in the capital and other areas and rationalising transportation cost during the holy month of fasting.

All said and done, keeping commodity prices stable during Ramadan and thereafter will remain a challenge.

Syed Jamaluddin is an economist and columnist

[email protected]

Share if you like