Anarchy In Kitchen Market

Anarchy in kitchen market
Swells pockets of the few.
Duality in dealing the issue
Makes the debate renew.

There has been anarchy in kitchen commodity prices. Edible oil prices garnered lots of attention and causing most worries to a typical household. I still remember more than a year ago I bought soybean oil at a price Tk 105/liter. Later the price rose to Tk115/liter. And now it is being sold at the retail shop at Tk 173/liter. Situation is so dire that head of a consumer rights protection body under the Ministry of Commerce even accused that a vested group plundered Tk 1000 crore from the market in a matter of a week by raising the oil prices¹. His accusations have gained some attention as edible oil production ,import and distribution are done by handful of groups. Moreover, it is found that on too many occasions edible oil at wholesale and retail level is being sold without furnishing any money receipt. Authority suspects hoarding and business malpractices. Government has even set the factory gate price at Tk 143/liter². Despite all the efforts, soybean oil prices show no sign to go back to Tk 105/liter or below level.

I have not seen before that head of department of consumer rights protection expressed his concerns about malpractices in kitchen commodity market.

The price increase came at a moment when Minister of Commerce assured the countrymen of a stable edible oil market during the fasting month of Ramjan,which will begin two weeks later³. As people here consume more fried items at break-of-the-fast time, edible oil prices soar at that time. Many like me suspect this price hike is deliberate to keep the promise made by businessmen to the Minister of Commerce so that oil prices remain stable during the month of Ramjan. Moneymaking from high edible prices during the fasting month is only scheduled ahead. And government may later take credit for containing the situation and keeping the market stable.

Malpractices and fraudulent activities in the business already costing Bangladesh economy dearly. Despite many corona incentives and ease in regulatory restrictions, ailing banks did not get back on track.Loan scams,corruption of management board and frauds almost plundered the Bangladeshi banks. Government’s review of policy on loan rescheduling and incentives to the businesses did not improve the situation. The result is 10 banks suffer from capital shortage.Of them,two specialized banks borrowed at a high interest but lent at a lower interest in a bid to comply government agricultural policies⁴.

During the corona outbreak, e-commerce scam did a tremendous blow to government,which has been reeling from a series of financial scams. It is assumed there will be less fraudulent incidents. But there is hardly any pause in such crimes.

Last week police nabbed a man for swindling Tk 400 million from 300 contractors giving fake work contract in a railway bridge to be constructed over river Jamuna. He even opened an office at posh residential area of Baridhara⁵.

Just two weeks ago Police caught a group of thieves who took care of the ATMs of a private bank. They regularly stole clients money by manipulating ATM machines.

Many fear that part of the soft credit and incentives distributed after the pandemic were misused and laundered abroad. According to Bangladesh Bank, bank deposits increased by TK 869 billion in 2020(November-July). But in 2021(November-July), bank deposits increased by TK 463 billion⁶. That means growth in bank deposits declined in post-pandemic period when economic activities were resuming. Moreover, high demand for US dollar last year supports the belief. Even government used the Forex reserve to supply dollar,$7 billion approximately, to the banks to ease the high demand. Later IMF raised serious objection about such use of Forex reserve and not reflecting it on the actual figure of Forex reserve⁷.

These are indications that govt is not at ease with the economy. The ongoing war in Ukraine further worsened the situation. Each year Bangladesh exports $420 million worth of garments to Russia.Due to war,that stream of revenue is stopped abruptly,causing worries to Bangladeshi exporters[**]⁸. And the country is also a major source for wheat procurement. Ensuing high fuel prices require that government raise subsidy to ensure its energy and food security.

It appears that kitchen market has become a lucrative source to make windfall gains for some quarter. And it is happening right under government’s nose. Onion price hike still rankles the Bangladeshis. Despite being perishable and hard to store, onion registered a high price. The unusual hike already raised serious questions about functioning of our market and government failure to deal with it. Recent edible oil price hike again brought to surface those questions.

Notes And References:

1 “Soyabean Teler Barti Dam Niye Ponero Diney Ek Hajar Koti Taka Hatiye Neya Hoyechhey: Bhokta Odhikar Songrokkhon Odhidoptor(TK 1000 Crore Pocketed During Soybean Oil Price Hike : Department Of Consumer Rights Protection)”,Kadir Kollol,BBC Bangla, March 09,2022. For more read at https://www.bbc.com/bengali/news-60680866

2 “Teler Dam Beshi Rakhae Dokan Silgala(Shop Closed For Charging High Oil Price)”,Daily Prothom Alo(Page 6),March 06,2022.

3 “Soybean Oil Price Won't Be Hiked In Ramadan: Commerce Minister”,The Business Standard, for more read at https://www.tbsnews.net/economy/bazaar/soybean-oil-price-wont-be-hiked-ramadan-commerce-minister-377818

4 “Muldhono Hariechhe 10 Bank(10 Banks Lose Capital)”,Daily Prothom Alo(Page 9),March 11,2022.

5 “Tinsho Thikadarer Chollish Koti Taka Atmasat(TK 400 Million Embezzled From 300 Contractors)”,Daily Prothom Alo(Page 6),March 11,2022.

6 “Korona-Poroborti Bank Babosthapana(Post-Corona Bank Management)”,Mueed Rahman,Daily Jugantor,February 06,2022. For more read here[*]

7 “Forex Reserves Overstated By $7.2 Billion: IMF”,Jebun Mesa Alo,The Business Standard, October 23,2021. For more read at https://www.tbsnews.net/economy/forex-reserves-overstated-72bn-imf-319909 [*]

8 “Bangladesh Garment Exports To Russia Stuck”,Maritime Gateway,March 10,2022. For more read at https://www.maritimegateway.com/bangladesh-garment-exports-to-russia-stuck/

[Note:This piece has been updated first on March 13,2022 at 10:03 AM and later on March 15,2022 at 10:30 AM Bangladesh Standard Time(BST).
*First updates include references to stalled garment exports to Russia and IMF concerns over misuse of Forex reserves.
**Second update include inclusion of a phrase on stalled Bangladeshi export to Russia.]