Mystery In Kitchen Market

We are taken aback by mystery in kitchen market, Addressing grey issues could make it perfect.

Last week Bangladesh Competition Commission(BCC) fined around taka 85 million some poultry farms, of which two are corporate farms, for influencing the prices in poultry market. The decision however makes no difference at the ground level. Prices of poultry meat and eggs are on the rise. The import of Indian egg encounters problem as importers are busy lobbying to remove 33% duties. In general, all types of vegetables register high prices. The reason put forward is that 72-hour-long rain earlier this October casts shadow over supply of vegetables. 20 or 30 years ago our link between consumer markets and agricultural area was very weak compared to the present day. Moreover, information took a long time to reach at consumer's end. And consumers are not familiar with supply-demand concepts. So consumer could not get a clear picture about the general condition of the agricultural produce. Not only that storage and preservation facilities were very limited back then. Yet unusual hike of agricultural produce was rare. And I cannot figure it out how on earth perishable items which have short span of existence could register such an unusual rise in prices. It is not even a difference of taka 4 or 5. In some cases , price increases by taka 40 or 50!

Information reach very quickly at the consumer's end. More storage facilities and seed varieties were developed to ensure year-long supply. But we see at whimsical pretext ,prices are increased by unreasonable level. Export possibility of potato prompted storage spree by certain quarter, pushing the potato prices up. As I mentioned in an earlier piece, kitchen market requires no documentation and regulatory grip is very weak in this market. In a press conference, one big poultry farmer admitted that they forced to raise the prices as they incurred extra money for customs delay in clearing poultry feed ingredient from the warehouse. So they just passed the burden to consumers.

Less documentation and rent-plus-extortion-seeking culture in local market also aggravated the matter. Money receipt, transaction through MFS or asking info about the origin of money invested at the wholesale level could drastically improve the situation. Higher prices only work as a reference point for some quarter to bring their money into the system. Flow of information is also exploited to a great extent in kitchen market. For example, it is reported that 72-hour-long rainfall caused widespread price hike in the vegetable market as vendors anticipate supply disruption. Autumn is about to start. Flash flood is very rare in this time of the year and water cannot clog vegetable plot for a very long time. On top of that, season-defying seeds make sure year-long supply of winter vegetables like cauliflower, cabbage, tomatoes etc. So there is hardly any uncertainty looming over the vegetable market. Yet we are witnessing unusual hike. But the news report of price hike and unusual rain works as a reference to raise the prices. Another example is the hike in egg prices. It has been reported that egg prices increase as there is a stalemate over duty waiver on import. But there is also a report that says that researchers found presence of nefarious ingredients in farm eggs. Earlier, we witnessed how dissemination of such research findings dropped milk sale in the market. Yet in this case egg prices remain less responsive to such news. Stakeholders controlling the market often yield news reports to raise the price level at unprecedented level. Election and local level election is knocking on the door. For them, kitchen market is a source to raise money for financing the election. I touched the issue in one of my previous pieces.

Ordinary citizens expect that Bangladesh Competition Commission intervenes more in the future. I think it is inappropriate to allow consumer good and real estate companies run media outlet or run for MP election. Because such companies will have enormous power to shape narrative to influence the prices. And being a law-maker he may engage in activities that block entry of competitors and deprive consumers availing goods at a competitive price. In real estate,NBR does not ask the origin of money invested. It allows the real-estate company to take new investment projects at ease. Now think it has a paper plant to feed its own broadsheet newspaper. Later it uses its paper production capacity to capture market share of exercise book/copy book. Its significant market share of copy book allows it to influence the price. Similarly, its news outlets shape the narrative to influence the consumer goods' prices. Now think another media conglomerate which has news outlets, publication house and digital streaming platforms. It has significant market shares in all the industries. On top of that it hosts every year award show for entertainment industry. Such influence gives it overwhelming power to influence the product prices in respective industries and shapes narrative to its end. Advertisement industry and many other industries vie for BCC intervention. BCC should intervene to curb these influences and capabilities. Unfortunately, dedicated market research organizations snooze their activities or wind up business. That is why there is some difficulty in ascertaining true market share of these companies based on market data.

Kitchen market mystery will not wither away overnight if grey areas and issues mentioned remain unaddressed. Introduction of corporate bond in financing electoral campaign, documentation, more competition and free flow of untampered information could give a sigh of relief to the consumers. For the moment, best strategy is to slash the purchase or stop purchasing. This passive resistance is the best response against anarchy.