Thursday, 7 July, 2022
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Yet another commodity price shock

Yet another commodity price shock

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As a shocking reflection of the strange times we live in, almost all commodity prices are increasing in repeated intervals. Although some factors arise from time to time that lead to price hikes, recent detection of illegal hoarding of massive amounts of edible oil in various parts of the country which led to a record hike in its price shows the outrageous role of market manipulators. After edible oil, onion and many other commodities, now the price of wheat products is rising sharply at the excuse of the Russia-Ukraine war and India’s speculated ban on wheat export.

There is no denying that the global situation has thrown the supply chain into disarray, but a couple of government high officials have claimed that India has not issued a gazette banning wheat. And even if India bans export of the commodity, the food minister is of the view that there is scope for importing wheat from India through government to government basis. Moreover, what is the logic behind the immediate impact of such a possible ban on the market? This is yet another indication that an unholy nexus of traders can increase prices of this or that product at their whim. The government must go after the syndicate and establish its control over the market.

However, galloping inflation is now a global reality and it is also a big concern for us. It is feared that the inflation rate may spike further due to disruption in the global supply chain. In the face of growing inflation, the people expect the government to take some effective measures like providing subsidies, withdrawing or limiting import duty or tax to alleviate consumers’ sufferings. Therefore, it is hoped that the government will take the issue seriously and take fruitful measures to address it in the upcoming budget.

Bangladesh can boast of having a robust agricultural sector. In the face of growing inflation, proper policy support can help strengthen the agriculture sector which will give us import substitution for a range of products. Besides, the government also needs to increase budgetary allocation for social safety nets, direct subsidies to agriculture and essential commodities. The low and middle income people in particular are going through tough times. The authorities concerned must take all out measures to alleviate at least some of their pains due to the high cost of living.