Price monitoring by business community | The Daily Star
12:00 AM, August 13, 2008 / LAST MODIFIED: 12:00 AM, August 13, 2008

Editorial

Price monitoring by business community

Nothing like it, if it succeeds

In a meeting organised by FBCCI with representatives from wholesale and retail trading communities and BDR taking part, a consensus was reached to the effect that the importers, wholesalers and retailers will constitute a market monitoring mechanism of their own to keep the prices at reasonable level during Ramadan. Should they fail in their mission, however, the joint forces will come in to monitor.
The business community is tasking themselves with a responsibility they did neither volunteer nor were they trusted with beforehand. It seems to us that they have matured into realising where their stakes lie.
We have been consistently advocating a policy whereby the marketing forces are allowed to operate without interference from any quarters that would disrupt equation between demand and supply eventually pushing up prices. Nobody is contesting the need for occasional oversight by the government of the market behaviour and its intervention, where necessary to beef up supplies; but that should not end up creating panic or a feeling of alienation among the business community.
The success of this approach is, however, equally dependent upon adherence to some business ethics, or call it social responsibility, on the part of the market players or the operatives. It has been unfortunately observed that if the prices increased abroad the businessmen in no time would raise the domestic prices. But conversely, if the prices decreased internationally, the internal prices seldom fell. The other unseemly feature is that if the wholesale prices decline, the retail prices take time to fall proportionately.
But thankfully there is a departure from the pattern lately, and that too, prior to Ramadan when the price pressure usually builds up. Prices of essential commodities like edible oil, pulses, rice and flour have dropped at the kitchen market over the last four days. Even though the drop in the wholesale prices is yet to be commensurately reflected at retail level, a declining trend has apparently set in.
Such trends will have to be furthered by the new price monitoring mechanism led by FBCCI. The disconnect between the manufacturers, importers and wholesalers on the one hand and the retail networks on the other will have to go at the operative level just as the coordination between the government ministries and the business community will have to be ensured through continuing consultations.
On the specific issue of monitoring, we believe, it's a very good idea to introduce voucher system both in the wholesale and retail markets so that price manipulation can be checked on a verifiable basis.

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