Lasting solution to market manipulation needed

Published: 00:00, May 05,2019 | Updated: 22:16, May 04,2019

 
 

THE government’s efforts in market regulation proved ineffective time and again. The failure becomes more evident in and before Ramadan as an unjust increase in goods prices, especially kitchen market items, becomes the norm although economic theories suggest that an increased demand with adequate stock should decrease the prices. In late March, the state minister for commerce sat with traders, wholesalers and other relevant parties to review import, stock and prices of essential goods and assured that goods prices would not increase in Ramadan as the stock of goods was higher than the demand. The prime minister also asked the traders to not increase prices of goods. Yet prices of garlic registered an increase in the city over the week ending Friday. In the past week, prices of sugar increased by Tk 5 a kilogram and refined and imported sugar sold for Tk 55–60 a kilogram in most city areas. But the nearing Ramadan proves that assurances from the highest offices of the government cannot keep the market stable in the absence of an effective market regulation mechanism.
Traders and wholesalers blame the consumer behaviour of buying large amount of goods that may have created a sudden supply crisis before Ramadan. Asked about the increase in sugar prices, some wholesalers said that the demand had suddenly increased and refiners faced trouble in meeting the order. Prices of sugar, therefore, increased because of congestion of trucks at mill gates. It appears that in the absence of an effective market monitoring, unscrupulous traders come up with excuses and ploys to create an artificial shortage every year to make unjust profit. The Consumers Association of Bangladesh, however, blames the government for its failure to ensure a steady supply of goods and lack of market monitoring. Drawing from past experience, the association said that syndicates of unscrupulous traders and law enforcers always find an excuse to irrationally increase gods prices before Ramadan. It also alleges that as traders are well connected to politically influential quarters, strict legal actions are not taken against traders for their fraudulent activities. Commerce ministry data show that in Ramadan, the demand for sugar and edible oil almost doubles while demand for onions increases by about 150 per cent, chickpeas by 860 per cent and lentil by about 113 per cent. The government should, therefore, have been prepared to deal with an increased demand and to prevent market manipulation.
While the government should take early steps to tackle the situation at hand and control the market, it should take lasting initiatives to prevent market manipulation in Ramadan. The government should invest in developing a market information system that monitors accurate and timely data of production, supply stock and market prices as well as information related to other factors that may affect kitchen item prices. There should be a mechanism so that market forces can control syndicates. It must also ensure that legal actions are taken against unscrupulous traders rising above any partisan consideration.

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