Govt setting oil, sugar, onion prices to bridle markets

The government is setting prices for various commodities to control recent turmoil – surrounding oil and sugar prices – on the local and international markets, as well as to keep the markets stable during the upcoming Ramadan.

As part of this initiative, the National Price Monitoring and Fixing Committee, which was formed under the Bangladesh Trade and Tariff Commission (BTBC), is working on pricing essential commodities.

The Ministry of Commerce has declared 17 products essential, including oil, sugar, onion, garlic, pulses, gram, dried chilli, cardamom, coriander, cumin, ginger, salt, etc. Of these, the oil, sugar, onion, ginger, pulses, and gram markets become volatile every year.

The committee will first make recommendations to the government on fixing the price of oil and sugar.

Meanwhile, the price of soybean oil has been increasing on the local market on the pretext of instability on the international market. Soybean oil is being sold for up to Tk140 per litre. Besides, sugar prices have jumped from Tk65-72 to Tk70-78.

Golam Mawla, president of Moulvibazar Businessmen's Association, told The Business Standard (TBS), "It would be better if the government could fix prices consulting with traders. However, there are doubts about how far it will be implemented."

Meanwhile, the month of Ramadan will start in the middle of April. Oil, sugar and onion prices go up every year ahead of Ramadan. Despite the government's frequent promises of market control, the control largely remains in the hands of traders.

This time, too, the government plans to take measures in advance as there is a possibility of market instability before Ramadan.

Munshi Shahabuddin Ahmed, chairman of the Tariff Commission, told TBS, "If the government takes required initiatives beforehand, traders will not be able to exert exclusive influence."

Usually, the association of refineries informs the Tariff Commission by letter before it reduces or increases the price of soybean oil, though there are instances where it raises oil prices without informing the commission.

All 17 of the essential products are import-dependent. Therefore, if the prices of the products increase on the international market, the same thing happens on the local market. Although the import dependence on salt is low, sometimes it is also in crisis on the market.

To this end, the committee will review the production and import prices of the products. It is also working on drafting a pricing system by reviewing: the cost of milling, processing and packaging; import duties; transportation costs; producer and importer profit; distributor or wholesaler profit, and retailer profit.

As per the decision of the committee, a nine-member technical committee has been formed, making BTTC Joint Chief Manzoor Morshed Chowdhury its convener. The committee, formed on 4 February, is working on the draft and supposed to submit the draft to the National Price Monitoring and Fixing Committee within 10 working days. The final decision will be taken after review.

Citigroup director Biswajit Saha, on behalf of the Bangladesh Sugar Refiners' Association, said, at a recent meeting of the National Price Monitoring and Fixing Committee, there is an upward trend in the price of unrefined sugar on the international market which should be taken into consideration for pricing on the local market.

At the same meeting, the director of Bangladesh Foreign Trade, Obaidul Azam said according to the Essential Commodities Act 1956, the government has classified some products as essential products. It is the responsibility of the government to keep the prices of these products within the purchasing power of the consumers.

To this end, it is necessary to formulate a reasonable pricing system by reviewing the local and international market prices of these import-dependent products.