Tax-free import to make essentials affordable

The finance minister yesterday proposed continuation of zero duty on imports of basic commodities, bigger food stock and strengthened TCB as measures to keep food market stable.
He proposed continuation of duty-free facility for import of rice, pulses, wheat, sugar, edible oil and onion. Major import-based commodities like these became pricy over the last one year due to high prices in the global market and depreciation of taka.
A litre of unpackaged soybean oil sold at Tk 107-110 yesterday in the capital where it was Tk 71-74 a litre a year ago. It means prices of edible oil spiralled up by 50 percent since Muhith placed the budget for fiscal 2010-11 pledging zero duty import benefit.
So prices of essentials are not likely to come down unless they drop in the international market.
For the price-hit consumers, the only respite is that the traders will not raise prices of basic commodities blaming import duty.
Muhith this time as well proposed strengthening the Trading Corporation of Bangladesh (TCB) for increased intervention in the market that suffers from occasional shortfall of supplies due to illegal hoarding and control of supply chain by a small number of importers and processors.
The finance minister said the government has taken steps for comprehensive reorganisation of TCB. A draft has been prepared for modernising the 1972 rule for TCB, and initiatives have been taken to increase its manpower.
Last year too, Muhith pledged to make TCB more efficient and effective to keep essential food prices stable and within people's buying capacity.
“We have planned to build an emergency stock of basic essentials worth Tk 2,500 crore through TCB this fiscal year,” he said, citing that 1,999 dealers have been appointed throughout the country to sell TCB-imported sugar, soybean oil, chick-peas, red lentil and onion.
Muhith, however, did not propose any allocation to help TCB buy enough essential items to keep a rein on the galloping prices.
Over the last one year, prices of rice edged up, although Bangladesh had had outputs above the estimated demand in the past two years. In the recent weeks, rice prices slipped a bit due to bumper production of Boro yet it is higher than that of the same day last year.
Besides, hikes in house rent, clothing and other household products pushed low and fixed-income groups to a tighter corner.
Even though the government's various measures to intervene through different safety net schemes contributed to keeping the prices of grains to a tolerable level, it did not help curb prices of other essentials.
Muhith yesterday once again pledged to frame the Competition Act 2010 to ensure fair competition in the commodity market and prevent all forms of anti-competition including collusion and cartel. He said the law is at its final stage.
He believes building an adequate stock of food for crisis period and making arrangements for distributing grains among ready-made garment and textile workers at reduced prices will have a positive impact on local food market as these schemes will increase supply and influence traders' sentiment.
The finance minister also asked the nation to be braced for more price hikes of petroleum in global market which will raise the commodity prices.