Govt blasé as commodity prices skyrocket

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While prices of essential commodities are spinning out of reach of the people since prices of fuel oils were hiked a week ago, government efforts to monitor the market or curb the prices are yet to be discernible.

The government does not even have a short-term plan to contain the prices, let alone a long-term strategy, while the prices have already gone beyond the low and fixed income group people’s affordability.

Meanwhile, both the people and government officials fear further rise in prices of essentials ahead of the month of Ramadan beginning in early September.

“The prices have been worrisome for us. We are searching for an immediate solution,” Food and Disaster Management Adviser AMM Shawkat Ali told The Daily Star in his office yesterday.

“I am discussing the matter with the finance adviser regularly and hopeful of finding a way out,” he tried to reassure.

Officials at the commerce, and food and disaster management ministries pointed accusing fingers at the global market situation as well as some local reasons for the astronomical rise in food prices, but none of them could shed any light of hope on an expected timeframe for stabling of the prices, if not a curbing of them.

“We are planning to hold a meeting with traders some time next week to dig out the reasons behind the price hikes,” Commerce Secretary Feroz Ahmed told The Daily Star yesterday.

Citing international and local reasons for the upward trend of prices of essentials, he said increasing production of food grains and ensuring food security could be a solution to the problem.

“In the age of free market economy when prices are going up globally, Bangladesh can’t remain out of the influence,” he pointed out, admitting that middle and low income group people as well as the ultra poor are the hardest hit.

Two government committees, functioning under the commerce ministry, failed to play any effective role in taming the wild horses of price hike. One of the committees led by the additional secretary to the ministry last met on June 19, only to review the market situation.

The other high powered inter-ministerial committee headed by the commerce adviser met on June 26. The meeting however had to be cut short as Adviser Hossain Zillur, who is also in charge of the education ministry, was in a hurry for publication of the HSC results.

The strong 18-member committee comprised of the secretaries to the commerce, agriculture, and food and disaster management ministries, the NBR chairman, director generals of the Bangladesh Rifles and the food directorate, the president of FBCCI, economists, and business leaders, evaluated the market situation, prices of essential commodities, and import aspects.

“I don’t see any effort on the part of the government to check skyrocketing prices of essentials,” commented a senior official of the commerce ministry.

One of the main responsibilities of the commerce ministry is to control prices but the commerce adviser and other top officials seem little worried about the latest round of price hikes of essentials.

Since the military backed caretaker government assumed power in January last year, a series of measures, involving various government agencies, were taken to ensure supply and to control prices. But all that has proven futile as the prices keep soaring making consumers’ dig deeper into their pockets just to stay afloat.

Against such a backdrop, the council of advisers formed a core committee on March 24 to keep the market on a tight leash, and to raise the people’s purchasing capacities. The committee led by Chief Adviser Fakhruddin Ahmed met regularly to find out ways and means to keep the prices within the reach of the consumers and to ensure that the poor gets a greater access to food.

Launching open market sales of rice, engaging the border guards Bangladesh Rifles (BDR) in retailing and distribution of essential goods, market monitoring by law enforcers, and expansion of government safety net programmes like vulnerable group feeding, were some of the steps the committee took in an effort to bring the prices under control.

But the price rally kept on going relentlessly, turning all government efforts into futile exercises over the past 18 months.

BDR had set up 75 fair price outlets in the capital and launched ‘Operation Dal Bhat’ to help the poor but the mission ended abruptly when they started selling rice for Tk 30 instead of Tk 25 after the government had withdrawn subsidies.

The market monitoring by BDR and Rapid Action Battalion (Rab) is also not evident anymore while the price lists that used to hang at every market in the city have also been missing for months now.

BDR had a taskforce patrolling the markets in the capital, the presence of which has not been seen over the last three months or so, although its dissolution was not announced officially.

When the government failed to import rice on time to cool down the market, many advisers claimed that prices would go down with the harvest of boro rice in March. The country saw a bumper boro harvest this year and there is a plenty of rice in the country, but with no cooling effect on the prices.

AMM Shawkat Ali said they will resume OMS and other social safety net programmes in September keeping in mind the coming of Ramadan, but added that the steps might not have any positive impact on the prices.

“We procure and stock only 6 percent of the total grain production which is not enough to reduce prices,” he said adding that the prices of essential commodities might however come down when world food market is expected to stabilize in December.

The government’s effort to purchase 5 lakh tonnes of rice from India so far brought only 1 lakh tonnes into the country while over the last 3 months there was no rice import in the private sector, according to the food adviser.

He however said the government’s target of purchasing the remaining 4 lakh tonnes of rice from India might see success by the end of August, but added, even that is also not likely to bring down the prices of rice.

Meanwhile, the hike in prices of fuel oils is also likely to have additional adverse impact on every sector, increasing the living cost in the months ahead, throwing the poor from the frying pan into a fire, with a high possibility of making a much severe dent into their buying capacities this time around.

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