Magic in market
Photo: TANVIR AHMED/ DRIK NEWS
A great magician's actual show takes place not on the stage but in the hall where the spectators sit. His performance does not depend so much on the magic he creates, but on the people whom he fools. Similar is the case with our businessmen. The way they have started to manipulate the market, particularly in foodstuff, is nothing short of magic.
The only difference is that the spectators clap and cheer while the magician makes an object vanish into the air, but the helpless consumers become bewildered when the magic in the market works and they truly see that all the essential commodities have vanished from the market, creating an artificial crisis.
The daily Prothom Alo> carried a report on its front page on October 5, based on a study of the retail food prices by the Trading Corporation of Bangladesh (TCB). According to the report, the food price has increased more than 28% on an average in a year and over 9% month-on-month. What is worse, the prices of major foodstuffs went up by up to 122% year-on-year.
The TCB study revealed that the prices of rice and wheat have increased 44% and 52% respectively in a year while the prices of edible oil have increased 35%. Among 30 food items in different categories, prices of at least 20 items had increased sharply in a year and of more than 25 items month-on-month.
The poor and limited-income group people are badly hit, as the price of rice has gone up by at least Tk.4-5 a kg in recent days. The wide gap between the prices in the retail market and the supply sources of millers and importers is the main reason of abnormal increase of rice price.
"Rice sells in the retail market for prices at least Tk.6 a kilogram higher than the mill gate prices. This is an abnormal difference. We need to find out some ways to reduce the gap," said Food Minister Abdur Razzque while talking to reporters. On the other hand, the wholesalers said that they were not responsible for the price increase as they get only Tk.0.20 a kg, and blamed transport cost and other expenses for rice price hike. This is really a puzzle that needs to be done away with.
The government has resumed countywide open market sales of rice at Tk.24 a kg to ease price shock to low-income group people. It has also directed the authorities concerned to monitor the market chain to identify the businessmen involved in price manipulation, which is hitting the poor very hard.
According to the food ministry, there are about 6.60 lakh tons of rice and 1.20 tons of wheat in the government's stock, and import of more rice and wheat from India and Vietnam is under way. Twelve ships from Vietnam have already reached Chittagong port and four more at Mongla port with a total of about one lakh tons of rice and 90 thousand tons of wheat.
Admittedly, the production of wheat in US and Russia had fallen remarkably, causing rise in price. But the price of wheat has marked an abnormal increase in comparison with the prices on the international market. Coarse rice is selling at Tk.33 and Tk.36 a kg this week, fine rice between Tk.42 and Tk.47, and flour at Tk.38 a kg.
The government's market monitoring body has listed 11 food items -- coarse rice, flour, edible oil, red lentil, potato, onion, dry chili, sugar and milk powder -- under the category of most sensitive essentials commodities. Sadly, almost all the commodities under the list have become costlier month-on-month and seven commodities year-on-year.
The price of flour increased by 53% in a year and 11% month-on-month, and soya bean oil by 19% and 10% respectively. Onion price rose 14% year-on-year and 43% month-on-month. Garlic price increased 24% month-on-month and 100% year-on-year, turmeric 7% and 122% respectively, egg 28% and 6% and pulse 21% and 39% respectively.
Although these statistics are quite frightening, the government's response to the market volatility has not been reasonably prompt. The measures so far taken to protect the poor and fixed-income people from the price shock are inadequate. However, open market sale of rice has provided the poor people a little respite.
If the government really wants to keep the market stable by thwarting the evil designs of the syndicates, it needs to reactivate the TCB. But it has only talked about TCB's reactivation without taking any effective step to translate that into action. The TCB thus remains dysfunctional, reeling under all sorts of constraints.
The government should realise that keeping the prices at a tolerable level is not enough, and it needs to ensure enhancement of people's purchasing capacity, as there has been significant erosion in their real income. Employment generation has not gained momentum in accordance with the government's promise.
The galloping prices of all essential commodities have plagued the common people for quite some time now. Though the trend of price hike caught on around five years ago, it has now started a fresh upward movement, which is too unpredictable and has surpassed acceptable limits.
The prices of foodstuffs including rice, wheat, edible oil, pulses and baby-food have registered another round of steep increase in the recent days and are now exorbitant prices. The majority of the people have been groaning under the crushing burden of galloping prices of essentials.
The government should take a realistic overview of the market situation and evolve a mechanism to bring efficiency in market management. An efficient market management mechanism based on the information on domestic and international market trends can play an all-important role to keep the prices of essentials in check. Proper collection of information and coordination of activities based on it is the bare minimum of doing of what is indispensable to establish a long-term and effective control on prices.
The market manipulators have clearly played the trick of shooting up the prices of rice from Tk.30 up to Tk.42 within weeks. If the government fails to thwart the dirty trick of the manipulators the people will continue to be the helpless spectators of the cruel magic in the market.
Price of foodstuffs is a crucial factor that directly affects the life and living of the majority people of the country. The government, however, has taken some steps to stabilise the volatile market. But in view of past sad experience, it may be difficult for many to be hopeful that the government's measures this time it will be quite enough to bring stability of prices in the face of the market manipulation by the syndicates.
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