Drive against price manipulation | The Daily Star
12:00 AM, August 19, 2010 / LAST MODIFIED: 12:00 AM, August 19, 2010

Editorial

Drive against price manipulation

Mere fringe-touching won't do

HIGH-LEVEL teams from the Commerce Ministry and the Directorate of National Consumer Rights Protection are engaged in monitoring the price of essentials and taking penal measures against those who failed to go by government fixed prices. But despite this high level inspection in which the errant kitchen market retailers were fined for illegally hiking up the prices of sugar, palm oil, soybean oil, etc, one could hardly notice any difference between the pre and post inspection price levels.
In the face of the defiant mood of the price manipulators, the inspection teams, however, expressed their determination to continue similar raids into the kitchen and wholesale essentials market throughout the month of Ramadan. Now the big question that arises is, given the outcome of the ongoing drive at its inception, why does the government think its repetition will produce result in the long run?
In fact, the traders in question are blasé about such government action. For we have seen for umpteenth time in the past how they flouted the authority on repeated occasions. They did not even give a damn about the price charts that kept hanging at the marketplace in obvious obscurity. Moreover, the fines they pay during the raids, they compensate for it by charging yet higher prices on their commodities from the customers.
The government hold discussions from time to time with business leaders on arresting the price spiral of essentials as well as of other commodities. But those hardly ever produced the desired result.
In the circumstances, the authorities would do well to monitor the outcome of their consultations with the retailers and wholesalers and concertedly do whatever is needed to correct the market distortion rather than treading the old path again and again. Actually, they should have thought of something better than merely going for such occasional, flying drives.
All said and done, the entire approach to solving the erratic behaviour of essentials price merits a radical rethink. Dealing with as complex a subject as market and its distortion caused by a vested quarter, official intervention should not be the last word. Other measures like using market forces themselves to discipline the manipulators need also be given due consideration. The ostensibly recalcitrant traders dealing in essential commodities, for instance, are often victims of extortion from the rent-seekers including, rather surprisingly, a section of the law enforcers, the organised thugs and the ruling party bullies. In consequence, the traders factor all these contingencies to recompense their losses through marking up the normal prices of commodities.
The fact of the matter is that, it is only a handful of people who operate from behind to manipulate the essentials market. So far, they could never be unmasked, while rackets and their mentors have gone scot-free. And the general traders, often small fries, have been made to face the music. So, it calls for eliciting necessary support from the common traders while conducting any operation to bring the price manipulators to book. Therefore, for success, the government will have to take all these aspects into consideration and devise a multi-pronged approach to arrest price spiral of essential commodities.

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