When green chillies become too hot to handle
What a week has passed, with everyone feeling the heat of green chillies – many without even consuming it. If the term skyrocketing needs to be explained, the price of green chillies should be included in textbooks, as we saw it shoot up from Tk 400 per kg to Tk 1,000 within three days during this Eid-ul-Azha. Netizens were quickly comparing its price with a kg of beef, which was selling around Tk 750.
Green chillies proved so hot to handle for the government that at one stage the commerce minister attempted to redirect the media to the agriculture minister for an explanation about the crisis. Though the crisis did not lead to any disorderly situation, the home minister, too, stepped in, and tried to placate consumers by saying the prices would come down soon.
Some apologists have tried to blame weather extremes, saying prolonged heatwaves have burnt chilli plants and crops in the northern parts of the country, and few others have said recent excessive rainfall is the reason for further damage. It may very well be true that this particular crop has suffered significant damage owing to weather adversity, but where was the government's appropriate and timely response? Weather extremes are nothing new in Bangladesh as heatwaves and floods are occurring more frequently, like the rest of the world, as a result of climate change, so some sort of a back-up plan and preparation ought to have been in place.
By the time the government decided to allow importing green chillies and tomatoes in bulk quantities, market volatility had reached the boiling point. Interestingly, we haven't heard anything about the demand and prices of tomatoes at retail or wholesale level, but green chillies have made their place in the headlines. It shows the difference between an essential condiment and a non-essential one. The Bangalee menu can be okay without any tomato, but not without chillies, most preferably the green ones. More importantly, it's essential with soaked rice, a staple food for the poor.
The green chilli fiasco is not the first such failure to manage the market – in other words, ensuring a balance between demand and supply and not allowing price volatility that could cause consumers' backlash and social unrest. The list of other essentials that have caused such an unreasonable price spike is too long, and includes rice, salt, sugar, onion, ginger and edible oil.
Unfortunately, past experiences tell us that the government has consistently failed to anticipate the ensuing crises, be it due to genuine shortage or artificial supply disruptions by scrupulous trade syndicates.
Unfortunately, past experiences tell us that the government has consistently failed to anticipate the ensuing crises, be it due to genuine shortage or artificial supply disruptions by scrupulous trade syndicates. These recurrences have happened despite the fact that the commerce ministry has established a Price Review and Forecasting Cell. According to the ministry's website, the cell was set up on November 24, 2014, and "reviews various data including production, demand, import volume, storage and collection situation, distribution system and comparative analysis of domestic and international market prices of daily necessities." Describing its role further, the website says, "As a part of doing this business, this cell collects information from different (organisations) regarding production, stock, demand, supply, local and international market price, information on (opening LCs) and settlement of these essential goods and further works as a helping hand of the Government to keep the market essential (commodities) stable."
The past crises of essentials clearly show that this institutional mechanism hasn't been working since its inception. The government has also established a competition commission and a consumer rights directorate. But none of them has brought relief to the consumers. It's either due to their incompetence, or they have not been allowed to act independently from political interference.
The riddle about the market disorder, perhaps, is best explained by Commerce Minister Tipu Munshi's admission in parliament when he said, "We are discussing the syndicate. It is correct that large companies are doing lots of businesses together. We need to think… We can put them behind bars and we can fine them. That might be possible. But it will be difficult for us to bear the sudden crisis caused by it. That's why we try to remain within the rules and [tackle the situation] through discussions."
This statement alone is good enough to prove the failure of governance, and poor consumers are being forced to pay the ransom to the alleged syndicates. It is therefore hard to discard the widely held perception of a nexus between the political authorities and the business syndicates. After all, businesspeople now dominate politics, and they will also have to fund their political friends and their parties' election campaigns.
As I write this article, the BBC has reported that the Competition and Markets Authority of the UK has just concluded its investigation into the fuel market and found that competition is not working, and retailers are overcharging motorists at the pumps. Responding to the finding, the UK government has announced a plan to introduce a new legislation to make retailers follow a price transparency scheme, so that consumers can easily find out the cheapest pump. It is aimed to restore effective competition among retailers and benefit the consumers. The UK example may not be comparable in Bangladesh, but at least it shows that free market doesn't mean reckless profiteering and monopolisation by the powerful businesses – individually or through syndication.
Kamal Ahmed is an independent journalist. His Twitter handle is @ahmedka1