Price hike: Ineffective govt policies responsible

Staff Reporter :
In the last one decade, the prices of different varieties of rice have increased by 122 per cent when the food inflation and other living costs have already burdened the ordinary segment of the population for a long time.

Bangladesh Institute of Development Studies (BIDS) on Thursday said that the price of one kilogram of rice was only Tk 36 in the year 2021 and within a span of 10 years the price has now stood at Tk 80 in 2023.

BIDS Research Fellow Dr Badrunnesa Ahmed revealed the information during a roundtable discussion titled “Volatility in Commodity Prices: Way Forward” at the CIRDAP Auditorium in the capital, with Salma Isalm, Publisher of Daily Jugantor, in the chair.

Dr. Moshiur Rahman, an economic advisor to Prime Minister Sheikh Hasina, was the chief guest at the roundtable, while Commerce Minister Ahsanul Islam Titu was a special guest.

Saiful Alam, the Editor of Jugantor, delivered the welcome speech. Former Director-General of BIDS Dr. MK Mujeri, CAB Vice President Golam Rahman, and esteemed fellow Dr. Mostafizur Rahman were present as expert commentators while Pradeep Ranjan Chakraborty, Chairman of the Bangladesh Competition Commission was present as an honourable guest.

Badrunnesa stated that due to ineffective government policies, the prices of essential commodities have risen in the market. “Despite market monitoring and price controls, the measures are not effective. When market monitoring is enforced, prices often return to their previous levels,” she said.

The researcher believes that the country has become dependent on choosing import goods. She mentioned that major buyers of oil such as China and India directly purchase oil from Russia, which keeps prices stable in their countries.

“But, Bangladesh imports oil from Western countries, which can lead to different prices between us and them,” she said.

Dr. Badrunnesa Ahmed said, “Without reserves, we cannot pose a credible threat in the market. This is why market prices are not stable. Speculation is being created.”

Encouraging research on market management of perishable commodities, she said, “Prices are rising in the perishable commodity sector, but the same is not happening in the non-perishable sector.”

Commerce Minister Ahsanul Islam Titu remarked that people have more money in their hands compared to their needs.

He stated that the products entering the market are not staying unsold, indicating that people are not returning empty-handed.

“It is impossible to monitor and control the market all the time. There is a supply chain in the market. At every stage of this supply chain, from producers to consumers, everyone has a responsibility,” the minister said.

He further mentioned, “Agricultural products are produced more during harvesting time.

Then there is no production for 3-4 months. If you do not store it properly during this time… if we cannot determine the difference between storage and maintenance, the market will suffer.”

“Similarly, if we import goods out of season instead of in season, we will have to pay more.

We are heavily dependent on imports for oil and sugar. It is quite challenging for a country like ours, dependent on imports, to supply to 17 crore people,” he said.

Dr. Moshiur Rahman said, “No matter how many laws are made or exist, if we cannot keep the supply of goods in the market in order, it will not be effective.”

“Therefore, it is important to maintain a balance between regulations, controls, and interventions in market management.

The barriers to reaching consumers from the production and import of goods to the warehouse must be removed. If this is not done, control becomes difficult,” he observed.

MK Mujeri said, “Price fluctuation and instability are separate issues.

There is a difference between them. However, when price fluctuations increase, instability also increases.

To solve this, we need to identify both short-term and long-term issues and work on solutions.”

“We also need to assess whether our regulatory agencies and responsible authorities are fulfilling their duties properly,” he added.

Mostafizur Rahman, said, “Attention should be paid to both price fluctuations and people’s purchasing power. We need to set the macroeconomic policies right. It’s heading towards risk.

If it’s addressed, price fluctuations can be controlled and purchasing power can be increased. I hope the government and Bangladesh Bank initiatives will help achieve the target.”