The government’s proactive steps to address the escalating prices of essential commodities demonstrate a commitment to alleviating the burden on citizens
In recent years, there has been a significant rise in the prices of various necessities, spanning from food to fuel, impacting the livelihoods of the mass people. The surge in prices is attributed to market syndicates involving unethical traders.
The soaring commodity prices have placed a strain on the majority of households, making it difficult for them to afford basic sustenance. To address this crisis, the government has taken various measures at different times to address the market situation. Among these initiatives, one is the sale of essential goods at reasonable prices through TCB. As a part of this, the government will recently purchase edible oil and lentils worth 246.5 million for sale at subsidized prices through TCB. If the price of fuel increases, the cost of production increases, which also increases the cost of transportation. As a result, the price of daily necessities increases. For this, the Cabinet Committee on Purchase has also sanctioned the procurement of over 30 lakh metric tons of fuel oil.
In response to the mounting onion prices, Prime Minister Sheikh Hasina, on Monday (December 11, 2023), instructed the cabinet to intensify market monitoring nationwide, aiming to ensure fair pricing and curb the escalating costs of onions.
The Trend of Price Hikes in Essential Commodities
Despite the global food price index maintaining a downward trend from July 2022 to June 2023, essential commodities in Bangladesh, including atta, edible oil, red lentils, onion, garlic, sugar, and eggs, experienced a surge of 38 to 219 percent over the past three years. This surge has inflicted severe hardship on lower and lower-middle-income individuals. The upward trajectory of essential commodity prices in the local market, amid a global market downturn, has been attributed by market experts to inflation and the profiteering of a segment of business people.
Government data reveals that, between August 30, 2022, and August 30, 2023, prices for items like onion, garlic, potato, fish, beef, sugar, egg, and ginger escalated by 25 to 234 percent. For the past few years, fixed-income individuals in the country have been adversely affected by uncontrolled price hikes in daily essentials, with their income growth lagging behind the inflation rate. The Bangladesh Bureau of Statistics reported that wage growth in the country has consistently fallen below the inflation rate for the past 18 consecutive months, with July recording 9.69 percent inflation and a 7.52 percent year-on-year increase in the wage rate index.
A subset of business people in the country reaped excessive profits, using the global economic situation as justification. The escalation in the prices of essential commodities in the local market began in the second quarter of 2020 under the guise of the global situation and has persisted for the past three years. Although global prices for commodities increased in 2021 and 2022, the global price index started to decline at the end of 2022.
In June 2023, the Food and Agricultural Organization reported a 14.87 percent decrease in the average food price index to 122.4 points from 140.6 points in July 2022. Despite a slight increase to 123.9 points in July 2023, up 1.5 points from June, the index remained 16.6 points below its value in the corresponding month of the previous year. Nevertheless, the prices of daily essentials continued to rise in Bangladesh, contrary to the decreased global prices.
Government Procurement Updates
The government is taking measures to control the prices of essential commodities before the national elections. The Prime Minister’s Office has instructed the central bank and a state-owned bank to ensure an adequate supply of dollars for the import of various essential items. Subsidized sales of potatoes, onions, lentils, and soybean oil will be carried out in the capital for low-income individuals. The government aims to reduce inflation to 8% by December through various initiatives, including increased market monitoring. Efforts are being made to increase the supply of goods to the market and provide food products to the poor at subsidized prices. The government expects food inflation to decline by the end of December. The government may take strict action against unscrupulous traders after the next election.
Meanwhile, the government is procuring edible oil and lentils valued at Tk 246.05 crore for subsidized sale through TCB. Additionally, the Cabinet Committee on Purchase has approved the acquisition of over 30 lakh metric tons of fuel oil. On Wednesday (December 11, 2023), Finance Minister AHM Mustafa Kamal presided over the meeting of the Cabinet Committee on Government Procurement and endorsed two associated proposals.
Moreover, following the Ministry of Commerce’s proposal, the plan to purchase 4 million liters of rice bran oil has received approval, with a cost of Tk 63.44 crore. The per-liter price will be Tk 158.50, up from the previous price of Tk 156.25. This procurement will be from Majumdar Products Limited and Majumdar Bran Oil Limited.
Considering another Ministry of Commerce proposal, the purchase of 50 lakh liters of soybean oil from Bashundhara Multi Food Products Limited has been sanctioned, totaling Tk 78.61 crores. The price per liter for soybean oil will be Tk 157.22, compared to the previous price of Tk 154.29.
In a separate proposal, the Cabinet Committee on Public Procurement has recommended the acquisition of 12,500 metric tons of lentils for TCB.
A total of Tk 33,955.58 crores will be allocated for 15 approved proposals to purchase over 3 million metric tons of fuel oil. This includes Tk 32,167 crores from government funds and Tk 1,789 crores from domestic banks and foreign financing.
Furthermore, Prime Minister Sheikh Hasina, on Monday, instructed the cabinet to intensify market monitoring to ensure a fair price for onions nationwide.
The surge in onion prices in Bangladesh followed India’s announcement of a ban on onion exports until March 2024. However, fresh-cut onions have started entering the market, and stringent measures will be taken against onion hoarders. Some responsible for the price hike have been identified, and actions are underway. Already, fines totaling 11 lakh taka have been imposed in 54 districts. Stability has been restored in the meat and potato markets, and the government is actively working to stabilize the onion market.
Conclusion
The government’s proactive steps to address the escalating prices of essential commodities demonstrate a commitment to alleviating the burden on citizens. Initiatives such as subsidized sales, increased market monitoring, and strategic procurement of goods reflect a dedication to curbing inflation. While challenges persist, the recent interventions and stringent measures against unscrupulous traders signal a positive trajectory towards stabilizing prices, ensuring fair markets, and safeguarding the well-being of the population.
