While the global food price index continues its downward trend, Bangladesh remains an exception with prices continuing to climb in the country.

Bangladeshi consumers are not getting benefits from the declining prices of food items in the global market due to poor market management systems and avaricious tendencies of certain businessmen through syndication, say economists and market experts.

The astounding rise in most of the food commodities prices has been continuing food inflation in an upward trend, they said.

According to the Food and Agriculture Organisation (FAO) of the United Nations food price index, global food commodity prices continued to decline in October.

The slight drop in October reflects declines in the price indices for sugar, cereals, vegetable oils and meat.

Lack of government initiative to regulate the market is one of the factors of food inflation, said Dr Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD).  

“Most of our food is import dependent, and the cost of import is increasing due devaluation of the taka against the dollar. This has an impact on the essentials’ price,” he said.

“There are some loopholes in the market management system. Some big importers are importing food commodities but they are increasing prices after making a syndicate. The slow release of food commodities by certain businessmen who are involved with importing food products is also one of the factors,” said the economist.

The FAO Food Price Index (FFPI) averaged 120.6 points in October 2023, down 0.7 points (0.5%) from September, continuing the downward trend and standing 14.8 points (10.9%) below its corresponding value a year ago.

However, consumers in Bangladesh are not getting benefits from the declining price of food commodities in the world market.

The commodities showed no sign of calming down in the country, driving food inflation above 12% for the third consecutive month in October, hitting consumers who spend most of their incomes to feed their families.

The food inflation was 12.56 % in October, 12.37 % in September and 12.54 % in August in 2023, according to BBS. The inflation was 8.50% in October, 9.08% in September and 9.94% in August 2022.

Speaking to the Daily Sun, Agro-economist and researcher Dr Jahangir Alam Khan said, “Apart from rice, the majority of essential food items such as lentils, onion, garlic, ginger, sugar, wheat, edible oil, green chillies, and powdered milk are import-dependent.”

“Local traders hiked the prices of food commodities beyond the global market’s increase, yet they do not lower them in response to the global price decrease,” he added.
He said that inadequate market management, a lack of available data on demand and supply, and the rising value of the dollar are hindrances preventing a decrease in local food prices.

In October, the FAO Cereal Price Index recorded an average of 125.0 points, marking a decrease of 1.3 points (1.0%) from September and a significant drop of 27.3 points (17.9%) from its value compared to the same period last year. Global wheat prices experienced a 1.9% decline in October, attributed to an overall increase in supplies in the United States and intensified competition among exporters.

In October, global sorghum prices saw an increase among various coarse grains, whereas barley prices experienced a decline. Additionally,

international rice prices witnessed a 2.0% month-on-month decrease, primarily due to subdued global import demand.

The FAO Sugar Price Index averaged 159.2 points in October, down 3.5 points (2.2 %) from September after two consecutive monthly increases.

In October, the FAO Sugar Price Index averaged 159.2 points, showing a decrease of 3.5 points (2.2%) from the previous month, following two consecutive months of increase.

However, the decrease in October was mainly due to the robust production in Brazil, despite the adverse effects of rainfall on sugarcane crushing in the first half of the month.

During the same period, the FAO Meat Price Index recorded an average of 112.9 points in October. This represented a marginal decrease of 0.7 points (0.6%) from September, marking the fourth consecutive monthly decline. Furthermore, it stood 3.9 points (3.4%) below its value compared to the last year.