Ominous market signals before Ramadan

The arrival of the holy month of Ramadan arouses deep concern among all sections of consumers, particularly the low income groups, as the prices of some key essentials record a substantial rise. To ensure a fat profit margin, unscrupulous sections of importers, wholesalers and retailers act in a way that goes against Ramadan's fundamental teachings and purposes -- spiritual reawakening through self-purification. Instead of adhering to these basic tenets of Islam, they resort to all sorts of dishonest activities such as hoarding of essential items to create artificial crisis with the heinous objective of prices and making a quick buck. They have been doing such things over a long period of time. Symptoms are already there that they are going to tread the same path during the ensuing Ramadan.

Media reports are galore that bottled soybean oil has almost disappeared from retail shops across the country due to its short supply ahead of Ramadan. This artificial crisis of edible oil has been created obviously with the ill-motive of making extra profit during the holy month when demand for the same almost doubles. It is an old trick practised by profit mongers. The unrepentant traders driven by insatiable greed for money hardly bother about consumers' woes. They still stick to their old way of doing business with no prospect of rectification. 

The refiners and importers claimed that they were supplying adequate quantity of the cooking oil to the market but field investigation found that retailers are getting only one-fourth of the volume supplied earlier. The traders are doing so when the government rejected their requests to raise prices last month. It may be mentioned that bottled soybean oil had disappeared from the market in last December too. The supply situation normalised after authorities had approved a price hike. They are applying the same tactics to force the government give in. They resorted to this deceitful tactics violating their own promise at the meeting with the Bangladesh Trade and Tariff Commission to keep supply steady. They are doing so despite reduction of value-added tax to 5 per cent from 15 per cent and removal of other taxes. Reduction of taxes is a matter of double dividend for them: they will import things at cheaper rates but will sell them at much higher prices as before.

Authorities withdrew or reduced import tax and other charges with the expectation that business houses would supply the items at reduced prices. But hoarders and profit mongers are reluctant to doing ethical business. They consider themselves omnipotent and infallible and think that they can do whatever they like. This is the source of their defiant attitude. They decreased the supply of oil when authorities asked them to keep supply steady; they insist on price hike and create artificial crisis when asked to keep prices low. They have thrown challenge to the authority of the government.

That unscrupulous section of business persons sticks to unethical way of doing things is the result of degradation of business ethics. They care little about doing business in a morally acceptable way. They no longer feel prick of conscience for fleecing common people. All advice and suggestions have failed to bring them back to the right path.

During the month of Ramadan, prices of essential items, especially food, are reduced in the middle-east countries including Saudi Arabia. Iran and Turkey keep watchful eyes so that none dare to increase prices. But keeping price stable is completely unimaginable in Bangladesh where majority of the population, traders and consumers are Muslims.

The result is that people have to move from shop to shop to buy the item, that too at much higher rates than the official rate of Tk 176. The price of loose soybean oil per litre has reportedly reached Tk 180-182 marking a nearly 4 per cent increase two weeks ago. Prices of palm oil and rice bran oil have also increased by different degrees. Refiners and importers will release bulk quantities of the culinary ingredient when its demand will multiply and price will rise as a result.

But these are not all about their deceitful tactics. They have allegedly devised an altogether new method of ensuring profit margin; reports have it that they compel wholesalers to buy other products to get oil supply.

These are some of the facts about availability and upward trend of cooking oil price. But edible oil is not the only item that syndicates of dishonest traders create artificial crisis of. This fake crisis of edible oil is just the tip of their hoarding practice. Other Iftar items like chickpea, dates, fruits as well as spices have to risk a similar fate. It is recorded in the annals of unethical business in the country that prices of anything, once raised, never come down.

The government is trying to keep price level within tolerable limit and with that objective in view seeking cooperation from the trading community; but to no avail. The dishonest sections of the business people are reluctant to budge an inch from their unholy pursuit of fleecing consumers. Indulgence and even encouragement from the previous corrupt regime have made them abnormally arrogant. No social, moral and religious teachings can bring them back to the path of ethical business.

Business people may have their own argument and have the right to bargain over the issues with the authorities but they have no right to hold the entire nation hostage. One of the causes behind their defiant attitude is the monopoly control over edible oil business. Authorities should device ways to exercise effective control over errant businesses keeping the consequences of their monopoly in mind. According to a report of The Financial Express, in the early 2000s about three hundred business houses used to import edible oil. The government may think of redistributing import licences to break the monopoly control of a handful of importers. Meanwhile, the government has taken a good initiative to examine every stage of the supply chain of some key commodities so that consumers can buy the essential items at fair prices. This may provide valuable insight into price spiral mechanism and suggest modes of intervention.

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