Lax market regulation, price instability continues

Published: 00:00, Feb 02,2020

 
 

ABRUPT and arbitrary price increase seems to have become the norm. In 2019, the onion prices increased to an unprecedented level. The Conscious Consumers’ Society says that the onion prices had a 400 per cent increase in four months in July 2–October 31, 2019. In the period, onion prices fluctuated at least on 24 occasions and consumers lost Tk 3,179,365,000 to a seemingly artificial onion crisis and consequent price increase. In January, the agriculture minister acknowledged that the skyrocketing onion prices were burdening and assured that prices would remain stable and within the reach of ordinary people this year. Despite the assurance, onion prices increased by Tk 30–50 a kilogram in the week, with the local variety selling for Tk 140–150 and the imported variety for Tk 80-140 in Dhaka on Friday. The most recent increase is indicative of the government’s lack of control over the market.

Prices of goods such as garlic and soya bean oil also saw an increase. Traders seek to justify saying that local varieties of onions and garlic are in short supply. The refineries increased the prices saying that the international market of bottled oil is unstable. People, meanwhile, struggle to make their ends meet as unstable price leaves an immediate impact on the living cost. In November 2019, economists and consumer rights campaigners talked about the commerce ministry’s unpreparedness to deal with any decisions on the international and natural disasters that may impact price stability. On September 13, 2019, India set Tk 71,821 in minimum export price for a tonne of onions which made the domestic onion market highly volatile. The market has since then remained unstable. On similar occasions of price increase earlier, consumer rights groups blamed wholesalers and traders for creating an artificial goods crisis and asked the government to take steps against hoarding. The wholesalers found dumping rotten onions at the time of serious shortage in November 2019 proves that their allegations were not unfounded.

A stable market is considered prerequisite to a stable economic growth, but the government has remained non-committal towards enforcing an effective market regulation mechanism. It is time that the government took steps to control onion prices and took action against the syndicate responsible for making the market unstable. The government must also take anti-hoarding steps, which should include an effective market monitoring, to ensure that no traders illegally hoard essential goods for profiteering interest. It must also install a system for routine analysis of the demand and supply to help the government to determine market regulation and price control strategies.

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