While falling global commodity prices continue to elude local consumers hard-pressed by surging inflation, traders cite how high exchange rates and import restrictions hold them back from lowering prices.
Consumer rights advocates and analysts, however, put the blame on government regulators' lax enforcement of laws that gives traders an upper hand and makes consumers pay exorbitant prices for both imported and locally produced commodities.
Consider the case of green chilli. Recently, its price skyrocketed to Tk1,000 per kg. This surge was attributed to a combination of heatwave-induced production issues and subsequent damage caused by rain during harvesting.
However, when the government permitted imports, the local market witnessed a decline to Tk300 or lower.
Similarly, onion prices surged to nearly Tk100 per kg and are still selling at Tk80-Tk85 per kg, more than double the price from two months ago. Sugar is selling above the government-fixed rate, and the memory of exorbitant chicken prices in recent months remains fresh in the minds of consumers.
While prices of certain products such as wheat and soybean oil have decreased in the international market, the same cannot be said for Bangladesh.
At least, eight laws directly pertain to essential commodities markets, addressing aspects such as supply, prices, quality, hoarding, and more. These laws are complemented by various new offices, committees, task forces, monitoring cells, and mobile courts, as well as the trading corporation of Bangladesh, which sells commodities at subsidised rates to assist marginalised consumers in alleviating inflationary pressures.
Then why commodity prices frequently go out of consumers' reach?
AHM Shafiquzzaman, director general of the Directorate of National Consumer Rights Protection (DNCRP), said, "Prices of different products jump suddenly, and when we initiate a drive, prices fall, indicating manipulation by businesses."
Pradip Ranjan Chakraborty, chairperson of the Bangladesh Competition Commission, revealed that they have filed over 50 cases against different companies, citing evidence of market manipulation.
He added, "During our visit to Khatunganj in Chattogram, the largest wholesale market in the country, we observed irregularities."
An official from the Bangladesh Competition Commission (BCC) alleged that a syndicate of wholesale traders in Khatunganj is hoarding essential commodities and fixing prices. The official, who spoke on condition of anonymity, said that the syndicate is operating in a "very sophisticated manner" and is making it difficult to prove their involvement.
The Consumers Association of Bangladesh (CAB), an organisation advocating for consumer rights, has been highlighting market manipulation and syndication for years.
Golam Rahman, chairman of the CAB, said, "Market manipulation by dishonest businesses has become a regular practice, resulting in consumer exploitation, and the government is well aware of this."
On 26 June, Commerce Minister Tipu Munshi came under fire over commodity price hike in the parliament.
During this time, taking harsh measures against businessmen, such as jail or fines, could lead to a sudden crisis. Therefore, the government is trying to control the market through dialogue.
Why regulatory framework fails
According to the Ministry of Commerce, the government has created an extensive framework to stabilise the supply and price of essential commodities in the market. The framework includes laws such as the Consumer Rights Protection Act 2009, Competition Act 2012, the Control of Essential Commodities Act 1956, Food Safety Act 2013, Agriculture Marketing Policy 2021 etc.
There are various regulatory bodies under the framework including the task force on review of commodity prices and market conditions, the Directorate of National Consumer Rights Protection, the Competition Commission, mobile courts under the city corporations, district level mobile courts etc.
Shakil Ahmed, deputy commissioner of Dinajpur, told TBS that daily commodity market monitoring is done through the operation of the Directorate of National Consumer Rights Protection. Most of the time, this kind of monitoring is more in the products where the price is fixed by the government.
The Directorate of National Consumer Rights Protection submitted a report to the commerce ministry in March last year, recommending that the competition commission and intelligence agencies monitor the poultry market and take action against unscrupulous traders.
The report raised concerns about a monopoly in the poultry market and the possibility of a syndicate or monopoly in the poultry feed market. However, no action has been taken against the traders by the ministry so far.
In October last year, the directorate inspected the sugar market and mills after widespread volatility. The report found that mill owners were manipulating production and stockpiling sugar.
Director General of the Directorate of National Consumer Rights Protection AHM Shafiquzzaman said that they have submitted 8-10 reports to higher authorities about field-level problems. The reports mention both visible and invisible obstacles.
"Different government bodies have a responsibility to control the market. All of them must play an effective role and make timely decisions," he said.
The commerce ministry has a specialised cell named the product price review and forecast cell to monitor the market. However, no activities of the cell have been seen for over a year.
The consumer rights protection directorate regularly fines traders for irregularities, but no major punishments have been handed down. In 2022-23 FY, the organisation fined 25,645 companies out of a total of 11,670 market campaigns.
On the other hand, the competition commission filed 50 cases against different companies last year for raising prices of different products, but the cases are moving slowly.
The task force on commodity prices is supposed to determine prices by taking into account the international market situation. But, it is quick to raise prices when the international market rises, and slow to lower prices when it falls.
Senior secretary of the Ministry of Commerce Tapan Kanti Ghosh told TBS that it is not possible to keep everything under control through market management.
"The irregularities in the market arise from various sources. In certain cases, these issues result from a shortage of supply in the global market, while in other cases, they are caused by internal factors," he said.
Experts say that traders use international market conditions, dollar crisis, and natural calamities as excuses to raise prices. The government's inability to quickly analyse price increases is being exploited by traders.
Prof Saima Haque Bidisha, research director at South Asian Network on Economic Modeling (Sanem), said that there is a lack in the implementation of market management policies.
"However, not all products need to be strictly monitored. Only five to 10 essential products should be strictly monitored. Locally produced goods should also be priced reasonably," she said.