The Financial Express

Dealing with soaring prices of essentials 

-FE file photo -FE file photo

Is there none to listen to the consumers' voice? One of the country's leading Bengali dailies wrote in its editorial on Friday last while commenting on the latest hike in edible oil prices.

Going by the developments in the kitchen markets in the recent months, one has ample reasons to believe that the men in authority have given up in the face of an unabated rise in prices of most essentials. Hence the silence!

The rise in prices of some items, including edible oils and sugar seems inevitable, for those have become costlier in the international market. Yet questions are being asked whether the increase in prices in the local market has been commensurate with that in the international market. But there is none to answer.

Consumers are clueless about the market situation, for the prices of some items have gone up abruptly for no justified reasons. None also has explained the reasons for the hike in prices of flour, lentil and onion and many more items.

Refiners of the widely consumed soyabean oil, and sugar, another key food item, have been hiking their prices on the plea of rising international prices. The prices of soyabean oil have gone up by nearly 55 per cent in less than one year. Until a couple of weeks ago, a litre of bottled soyabean oil was priced at Tk 153 at the retail level. Now it costs Tk 160. The refiners wanted the hike and the government obliged.

In the case of sugar, the refiners have been doing the same. Sugar had a price tag of Tk 60 a kg a year ago. Now it sells between Tk 75 and Tk 85. The refiners have submitted a proposal to the government for yet another hike by Tk10 a kg. It may not take too long a time for them to secure official approval.

The increase in prices has not remained confined to edible oils and sugar only. Most essentials have become costlier. According to the state-run Trading Corporation of Bangladesh (TCB), the price of rice has gone up by about 7.0 per cent, atta 13.5 per cent, maida 30 per cent, soyabean oil 49 per cent, palm oil 52 per cent, sugar 26 per cent, lentil 29 per cent, clove 41 per cent, and onion 42 per cent over the last one year. The traders have hiked the prices of soyabean oil on seven occasions during the period under the TCB review.

The impact of the price hike on the poor and both low- and middle-income families does not need any elaboration. The queues before TCB trucks selling a few key essential items, including soyabean oil, bear testimony to that fact. Earlier, only poor and low-income people used to make the queues. Now, many middle-class faces are seen joining those. To get some respite from the soaring prices, the latter have swallowed their middle-class pride.

None would expect the traders to sell their products below their procurement cost. But the speed at which they have been hiking the prices of essentials is not acceptable.

There is no government control over prices. The refiners of sugar and soyabean oil seek government approval when they need to hike the prices of their products. In most cases, the approval comes in no time. No official approval is required for other food items. Traders are free to fix their rates. That is how a free-market economy operates. The government is not supposed to intervene in the market. But such freedom applies only in an efficient market mechanism where everybody plays by the rules and regulatory entities concerned plunge into actions when there is a deviation.

The private sector does very often complain about the ease of doing business in Bangladesh. Undeniably, there are hurdles, but the businesses have been enjoying full freedom in fixing their price tags. Lately, the extent of freedom appears to have gone too far.

The Covid-19 pandemic has hit everyone. Businesses have also suffered as they have incurred financial losses. It is natural on their part to recoup losses. But there should be a limit to it. They need to recognise the plight of the poor and low-income people. Many people lost jobs or saw substantial erosion in their income.

Life is returning to normal gradually in recent weeks, as infections and fatalities have been coming down, albeit at a slow rate. It would take time for most people to go back to the old days. Much would depend on the pace of economic activities, which again depends on the developments at home and abroad.

On the external front, the situation is a bit murky because of fuel price rise, supply crunch and inflationary pressure on major economies. If the country's remittance and export earnings suffer in the coming days, the domestic economy might come under pressure as well.

The government must know that the hike in prices of essentials erodes its credibility, no matter how justified the market developments are. It needs to act so that the effect of the price rise becomes less intense for poor and low-income people.


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