Editorial
Holding down prices
Benefits of increased supply yet to accrue
Prices of consumer items for Ramadan are on the rise owing to increase in demand which would normally imply that supply might not be enough to cater to the demand. But that is not the case as the market does not show any dearth of commodities; in fact it looks plentiful. There is, of course, an added dimension i.e. bulk or panic buying to the demand side which is instrumental in pushing up prices. For instance, consumers started buying commodities like onion, potato, sugar, lentil etc to store them for fear of any price hike during Ramadan.
A mix of countervailing measures need to be taken: first, consumers better apply some self-discipline and not resort to bulk buying out of sympathy for the people with limited purchasing power and also because they should not be unwittingly any party to the price hike through a simulated high demand situation. Secondly, public and private sector importers should try to be a step ahead of the market demand allowing for the fact that people will be buying more during Ramadan in any case. That is exactly where they can spread their profits thin over wide ranging and heightened demands and still earn significant amounts at the end of the day. They can hold their profit motive within limits in keeping with the Ramadan spirit.
The government has taken steps to strengthen the supply side. The BDR have started selling some essential commodities from one hundred outlets in the city. The members of the Ansar and private sector traders are to operate another 100 retail outlets in the city. Very importantly, the state-owned Trading Corporation of Bangladesh (TCB) are to sell some essential commodities at fair prices in four divisional cities including Dhaka. In the capital city they will sell the items from 46 spots through trucks.
These dispersed marketing arrangements are likely to cool off the prices somewhat. But they are urban centred so that there is a need for further dispersal of the network to include the rural areas with an emphasis on traditional market mechanisms.
For all latest news, follow The Daily Star's Google News channel.
Comments