Government still lacks effective market regulation

Published: 00:00, Sep 22,2019

 
 

IN THE wake of restrictions that India imposed on tuber shipment to other countries, onion prices in Bangladesh increased by Tk 20 in one week, with the local variety selling for Tk 70–80 a kilogram and the imported Indian variety for Tk 70 on Friday. On September 13, India set Tk 71,821 in minimum export price for a tonne, which made the local onion market volatile. Some retailers sold onions even for higher prices. On September 17, a Bangladesh Tariff Commission member said that onion prices would go down in 24 hours because of government measures and an adequate supply. The government that day also began open market sales of onions to curb spiralling prices of onions. The sale of onions at a subsidised price on six locations in the capital Dhaka has, however, failed to create any impact on the market. Onion prices continuing to increase shows that the government’s market regulation mechanism is by and large ineffective.

Bangladesh meets a portion of its annual demand for onions with imports from India and Mayanmar. India, as one of the major onion exporters, set the minimum export price of onions to bring down soaring prices on the domestic market there. In August, according to media reports, the Indian authorities warned strict action against the hoarding of onions amidst supply disruption fears because of floods in parts of its major onion-growing states. Experts and consumer rights advocates that time warned that India’s decision would impact the Bangladesh market. The government, however, chose to remain inactive when it should have monitored the market of the country of import. A delayed action allowed unscrupulous traders to take advantage of the situation and to increase onion prices without considering consumer affordability. The commerce ministry appears not to have any in-built mechanism to deal with such crises. In this context, economists and consumers rights groups have for long demanded a systematic analysis of the local demand and supply that could help the government to work out market regulation strategies. The situation now indicates that the government still lacks an effective market monitoring and regulation mechanism. It is, therefore, not surprising that traders have arbitrarily increased prices of other items too.

The government, under the circumstances, must strengthen its market monitoring and regulatory mechanism. In doing so, it must ensure that government has an adequate stock of essential commodities to control the market in unexpected situations such as the one caused by India’s decision of the export of onions.

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