A Country For Speculators And Profiteers

Recent price overshoot in kitchen item, Sign that black money enters the system.

World Bank in one of its report "Atlas Of Sustainable Development Goals 2023" observes that two-thirds of Bangladeshis cannot afford healthy foods. This lays bare the fall in purchasing power of the Bangladeshis. I have also read a report of a local daily that says Bangladeshis in general lags behind other countries in the ranking of countries based on meat consumption¹. India is at the bottom segment of that ranking and in South Asia Bangladesh is ahead of India. Belief/choice is a factor that puts India in that position. But for Bangladesh it is obviously the falling purchasing power.

This bakri eid is another testament of this dwindling purchasing power. Many households abstained from observing the ritual of sacrificing an animal. Meanwhile, bovine market registered a decline in prices in recent years. Many bovine dealers preferred to withdraw their animals from the market as they did not get the anticipated price. This tells how households are coping with the rising inflation.

Few days before bakri eid chili price soared to an unprecedented level,leaving everyone flabbergasted. Earlier onion, soybean oil, broiler, egg had also shown unprecedented volatility. Now as the chili price is being normalized, potato price tends to show unusual hike. During the festival season like bakri eid when more and more people eat meat,a little bit of price increase is justified. However, chili was sold over Taka 700/kg for several days². Reason put forward was the lack of supply. However, other essential items(i.e, cinnamon, clove,black pepper, cumin,zinger, garlic) that are quintessential in cooking meat did not register such unusual hike.Chili is harvested here and even grown in pots. Excess demand is being met by importing from neighboring countries. But one thing that keeps chili, onion separate from others is that these things shrink in volume over times and one cannot store them long. Onion can be stored by making chips. Potato can be stored in cold storage. Even temperature variation could ruin the whole stock. Low quality fetches low prices. Moreover, these items have elastic demand unlike rice and wheat. People can prepare their meal without chili or onion. People will stop buying potato if it shows unusual price hike. They will rot if people stop buying them. This is not true for rice or wheat. People have to fill their stomach.

What is interesting no sooner had the trucks reached Indo-Bangladesh border chili prices dropped to normal level. Speculative role played some part here. Earlier, broiler meat and egg market showed this tendency. Consumer rights' body even fined few wholesalers for not furnishing any receipt/ for selling at prices above the set price. Long before that soybean oil market registered unusual hike and wholesalers denied outright to give any receipt to the retailers. Even before that in the name of e-commerce motorcycles, soybean oil were being sold at discounted price and many people lost their money in this fraudulent multilevel marketing scheme. Recently, we see how metro fare is inflated above the bus fare to give favor to the transport businessmen. According to a report by a local daily, metro fare is cheap compared to bus fare and varies during weekdays and the weekends in neighboring countries³. This is not the case here. In our metro there is a concept of peak and off peak hour but there is no change in fare. More recently, during the last one year as government followed multiple exchange rates while certain quarter laundered money abroad and delayed bringing export proceeds in time to gain later from further depreciation of Taka.

This is all happening ahead of next election when clandestine cash will come into play. Since less paperwork is needed, cost of legalizing black money is pretty low in the kitchen market. One can introduce huge sum of money into the mainstream through price variation in kitchen items.

Bangladesh has slipped into such a situation where regulatory grip is weak and privileged quarter indulges in swelling their wealth through profiteering.

Notes And References

1. "Bangladesh Soho Bisher Dosh Desh Jekhaney Sobchey Kom Mangsho Khawa Hoi(Bangladesh And Ten Other Countries Where Meat Is Consumed Less)",The Business Standard,June 30,2023. For more read at https://www.tbsnews.net/bangla/%E0%A6%AB%E0%A6%BF%E0%A6%9A%E0%A6%BE%E0%A6%B0/news-details-154686
2. "Ekta Kancha Moricher Daam Ektaka,Daam Barar Karon Ki?(One Chili Costs One Taka,What Is The Reason Behind Price Increase?",Sanjana Chowdhury,BBC Bangla,July 02,2023. For more read at https://www.bbc.com/bengali/articles/cw4vzd21e2do
3. "Metro Rail:Passengers' Welfare Association Demands 50% Reduction In Fare",Dhaka Tribune,December 17,2022. For more read at https://www.dhakatribune.com/bangladesh/2022/12/17/passengers-welfare-association-demands-reducing-50-fare-rate-of-metro-rail

[Update: This piece has been updated on July 09,2023 at 12:20 Bangladesh Standard Time(BST).Update includes insertion of references.
---Rezaul Hoque]