Milking the consumers, freely
Shamsul Huq Zahid | Published:
February 01, 2016 13:43:09
October 23, 2017 18:08:04
Consumers in Bangladesh are always at the receiving end. Almost everybody is out to milk them when it comes to fixing the prices of daily essential items.
They might be wondering at times which one of the two systems---the all dominant free market economy or the almost non-existent centrally controlled economy--- would suit them best.
The people in this part of the world have had the experience of a blend of the two systems under which the government controlled all mills and factories and dictated commodity prices. But the people had a very painful experience during the post-liberation days as widespread corruption, mismanagement and incompetence had ruled over the state-owned enterprises involved in production of goods and delivery of services at the consumers' level.
Following the political changeover in 1975, the country gradually started moving towards full market economy. The government control over commodity prices barring fuel oils and a few selected items, including essential drugs and medicines, has gone long ago. One of the main reasons for switching over to the so-called free economy has been to offer to the consumers the benefit of competition among innumerable players involved in production and marketing of goods and services. Most countries where the system is in place, consumers have been receiving such benefits.
But, in Bangladesh, the consumers have valid reasons to grumble about that. Here, in a number of cases, traders and producers of goods and providers of services do compete but they do usually behave miserly in the matters of transferring the benefits of competition to the consumers. Their completion is, thus unhealthy.
Bangladesh traders, it is alleged, in no time hike the prices of commodities responding to any uptrend in the international market. But they do the opposite when the prices of commodities decline in the global market. In some cases, the traders just ignore the fall in international prices and, in others, they lower the prices very marginally.
Consumers are now having the experience of the second kind. The prices of most commodities, including food items, metals and fuel oils, have been on the decline for quite some time. The fall in international prices coupled with strong Bangladesh taka has not been able to influence much the price tags of most items in the local market. This happens to be true particularly in the case of daily consumables.
A report published in a Bengali contemporary Saturday last explained how traders had been depriving the consumers of the price benefits they deserved because of the fall in prices of a number of daily essentials in the international market.
The report quoting statistics compiled by international organizations said the price of coconut oil in 2011was US$2260 per tonne. The price of the commodity gradually came down to only $793 per tonne last month. But the price of the same at the retail level in Bangladesh has not fallen by even a taka during the last four years. In addition to small local companies, some big names, including a couple of multinationals, have been marketing coconut oil in attractive containers.
In 2013, a tonne of powdered milk used to cost US$5245 in the international market. On January 19 last, the price has come down to US$2188, representing a 58 per cent fall in price. But the extent of cut in prices of the item locally is 25 per cent. However, the consumers should be happy for at least the traders dealing in powdered milk have passed some benefits on to them. The importers of soyabean oil have also passed a part of the benefit of price fall on to the consumers.
There has been steep fall in cotton prices in the international market. But the prices of clothes and textile have not undergone any change in the local market. One can cite identical developments in the case of many other essential commodities.
The report of the vernacular daily also furnished a piece of interesting information. On the official list of essential commodities, cassia leaf (tejpata) has got a place, but not powdered milk, baby foods, flour and coconut oil. It seems that the government should review its list of essential items and expand it for better monitoring of their prices by the relevant agencies.
The propensity among an unscrupulous section of traders to make high profit at the cost of consumers is the root cause of the problem. The government appears to be indifferent to that problem. Even in the countries that champion the free-market economy do not allow any arbitrary fixation of commodity prices. There are certain norms and traders are required to go by those. The relevant government agencies here would have to be serious about protecting the interest of the consumers. And to do that they will have to be truly proactive. It is expected that the officials concerned will keep constant watch on both global and domestic prices of essential commodities and ensure a balance between the two.