December 11, 2023
DHAKA – There seems to be no getting out of the unending nightmare that is the rising prices of essential commodities. In the latest development, onion prices have nearly doubled overnight, rising from Tk 140 a kg on Friday to Tk 240-250 a kg on Saturday. The reason, apparently, has to do with India’s decision to extend the duration of the $800-per-tonne price floor for onion export to Bangladesh till the end of March next year. As the news broke out, traders here began stockpiling what onion was available, driving prices to insane levels.
It’s interesting that whenever an announcement like this comes out of India, the first response from local traders/importers is stockpiling products, creating an artificial crisis, and thus manipulating prices. This time, too, they cut down onion supply to make profits, according to a leader of the clearing and forwarding agents at Bhomra land port in Satkhira. For years, we have witnessed the same pattern repeating but failed to address it every time.
While a crisis may naturally occur sometime after an import restriction, it doesn’t have to lead to a collapse of all market controls. How can traders then so blatantly disregard government-fixed caps on prices of essentials, including onions, which they have done frequently in the recent past? Reportedly, the Directorate of National Consumer Rights Protection launched a drive on Saturday, raiding 57 onion markets across the country and fining 133 entities a total of Tk 666,000. Considering that previous government attempts to control prices have borne little fruit, we remain sceptical about the effectiveness of ongoing measures to drive down prices without really reining in the syndicates as well as ensuring uninterrupted onion supply.
Given the political instability ahead of the general election, some level of uncertainty in the market is expected. But an abnormal price surge is completely unacceptable. As well as strict enforcement of price caps and punishing errant traders, the priority right now is finding alternative sources for import of onions and resolving the persistent Letter of Credit (LC) crisis. The government also must critically examine the role of relevant state departments whose oversight failure has led to the current debacle. It must undertake necessary reforms so that ordinary citizens, especially the poor and low-income groups, are not burdened with unnecessarily inflated prices every now and then.