Monday, 25 September, 2023

Rising food prices may fuel inflation further

  • ANM Mohibub Uz Zaman
  • 23 August, 2023 12:00 AM
  • Print news
Rising food prices may fuel inflation further

Popular News

A staggering rise in food prices has placed consumers in a tight corner, as food inflation continues its upward trend.   

According to the Bangladesh Bureau of Statistics (BBS), the food inflation rate edged higher to 9.76 percent in July 2023, the same as the previous month but up from 8.19 percent in July 2022.

A renewed hike in food prices this August has made essential commodities increasingly inaccessible to consumers.

Market experts are attributing the situation to a lack of government initiative and the avaricious tendencies of certain businessmen, resulting in a significant destabilisation of the essential commodity markets.

Items such as egg, fish, lentils, onions, potatoes, garlic, ginger, cumin, palm oil, and all kinds of vegetables have witnessed manyfold increases in prices.

Agriculture economist Dr Jahangir Alam Khan warned of the potential for further food inflation this month due to the escalating cost of food.

The situation has been further exacerbated by heavy rainfall and flooding, impacting crops across the country.

According to the Trading Corporation of Bangladesh (TCB), local onion prices surged by 45 percent in a month, imported onion by 50 percent, and local garlic by 42.42 percent. Other items such as lentils, ginger, and palm oil also saw significant increases.

Fish prices were not spared, with rohu increasing by 25 percent and hilsa by 7.89 percent. The overall upward trend included a range of other essentials, despite Bangladesh witnessing surplus production in eggs, fish, meat, rice, and vegetables.

Dr Jahangir Alam raised concerns over the efficacy of surplus production when commodities are not provided at reasonable prices.

“The purpose of surplus production will not be fulfilled if we cannot provide food at a reasonable price. We should introduce new technology for reducing production costs,” he said.

The issue of syndicates has been brought to the forefront as another significant cause of the price inflation. Despite the abundance of production, economist Dr Jahangir Alam highlighted that the government has not been able to reduce or break the influence of syndicates in the market.

"They should break the syndicate to give relief to consumers from high food prices," he stressed.

In a recent development, the price of imported onion in the capital surged by Tk 8-10 per kg, settling at Tk 70-75 on Sunday, following India's decision to impose a 40 percent export duty on the item.

Businessmen responded to the export duty news by quickly increasing the price, even before the arrival of the new consignment of onion.

Local onion prices also witnessed a sharp increase, selling at over Tk 100 per kg on Monday, up from Tk 80-90 per kg the previous day. Considering that imported onions were available at Tk 55-60 per kg just on Friday, the hike has been alarming.

A trading syndicate's influence was also felt in the price of farm eggs, which soared to Tk 175-180 per dozen from Tk 145, despite a decrease in feed price.

As the Directorate of National Consumers' Right Protection (DNCRP) fixed the retail price of farm eggs at Tk 12 per piece, the price has since declined to Tk 150-155 per dozen from Friday.

S M Nazer Hossain, vice president of CAB, told Daily Sun that the high profit-making trend of unscrupulous businessmen, often through syndicates, is responsible for the unnatural price spiral.

“Businessmen are artificially increasing the price of food essentials. They always highlight causes like rain, drought, and transport cost, but there is no similarity to reality in this,” he explained, adding that the government's lack of action and the commerce minister's expressed helplessness are concerning.

Hossain further emphasized that if the government takes strong measures against the syndicates, it could set an example to deter future occurrences.