The government’s inability to pass on to consumers the benefit of lower food prices on the international market for the fifth consecutive month is unacceptable. Food prices, according to the Food and Agriculture Organization of the United Nations Food Price Index which tracks the monthly change in international prices of a basket of foodstuffs, have steadily fallen on the international market since hitting an all-time high in March after the Russia- Ukraine war began. The resumption of exports from Ukraine under a special agreement has depressed prices of wheat and other products while fuel oil prices, which hit a record high in March and have remained high for the past four following months, also fell significantly to near pre-war levels. The government appears to have largely failed to pass on the benefits of lower international prices to consumers. Although the government has taken various measures to curb soaring commodity prices by reducing import duties and fixing prices, it has not been able to prevent the market from being manipulated by merchants of profit. The government, for example, reduced import duties on rice, but the price remained unchanged.
The government also decided to fix the prices of nine essential products, including rice, coarse flour, coral lentils, edible oils and sugar. The Minister of Commerce announced the measure on August 30 to keep the prices of essential goods within reach of the poor and people on fixed incomes. The decision came at a time when soaring property prices have made it extremely difficult for the poor and those on fixed incomes to survive economically. Worryingly, each of the similar measures taken previously failed as the government was unable to provide regular market surveillance and compel traders to follow set prices. Edible oil prices rose again by Tk 3-5 per liter last week despite the government fixing prices. Market experts say the decision to centrally control the prices of essential goods is necessary, given the market volatility, but the main challenge for the government is to ensure effective enforcement of the decision. The Minister of Commerce earlier acknowledged the government’s failure to maintain market stability and that a portion of traders maintained market instability for profit interests. The government ran episodic campaigns and in isolated incidents fined traders for charging more than set prices, but it all went back to square one.
The downward revision of the prices of essential goods, in the wake of the fall in the prices of these goods on the international market, is what is needed. The government must at the same time deal with its own failures in the control of the market, the corruption in the system and take action against the union responsible for the instability of the market.