Economists, student leaders, and trade representatives have accused local big businesses with close ties to the previous government of engaging in price gouging of essential items over the past 15 years.
At a discussion in Dhaka yesterday, they said that some of these conglomerates, during the deposed Awami League regime, were so influential that they set higher prices for imported goods on their own after releasing shipments at Chittagong Port.
For all latest news, follow The Daily Star’s Google News channel. The event, titled “Fair Pricing of Food Commodities: Searching Market Supervision Strategies,” was organised by The Daily Bonik Barta at the Pan Pacific Sonargaon Dhaka.
Commerce Adviser Sk Bashir Uddin was among the participants.
The speakers argued that because the highest levels of the previous government were complicit in manipulating commodity prices, big businesses faced no consequences. Instead, they received gas connections for their new factories, which pushed small and medium enterprises out of the market.
“The big businesses were so powerful that they divided the whole country like their territories of the kingdom,” said Sarjis Alam, chief coordinator of the Jatiya Nagorik Committee.
“For their convenience, they did not compete in trade; rather, they helped each other to become more powerful,” the student leader added.
Now, after the political changeover in August last year, several speakers, including Sarjis, called for improving law and order to prevent extortion at various stages of the supply chain.
Sarjis admitted that the law-and-order situation has not improved to the expected level so far.
He said that people want to see the government fulfil its commitments and hoped the two dozen advisers of the interim government would deliver at least 24 significant achievements that would be remembered by the people.
He also hoped that market monitoring would no longer be a superficial exercise but would instead produce meaningful results.
Anu Muhammad, an economist and prominent rights activist, said the government must take concrete steps to revive the economy, improve law and order, and establish a commission for the agricultural sector.
Bonik Barta Editor Dewan Mahmud moderated the discussion.
Apart from extortions, the event addressed the higher exchange rate of the US dollar and complex price-fixing mechanisms, which have also impacted commodity prices.
A trader from Naogaon said, “In my district, there were more than 60 rice husking mills, but now 11 big companies are controlling the market as small enterprises can no longer compete.”
Abdur Rahim Khan, additional secretary to the commerce ministry, said the government has been trying to introduce an Import Development Fund so that importers can take loans at low-interest rates for importing goods.
Abdur Rahman Khan, chairman of the National Board of Revenue (NBR), said, “Until now, poor people have been contributing more to the government coffers, as the majority of revenue comes from customs duties rather than income tax, despite there being 1.60 crore tax identification number holders in the country.”
“Of this number, some 60 percent of people submit tax returns.”
He added, “Many people say that Bangladesh’s tax-to-debt ratio is still better, allowing it to take on more foreign loans, as developed countries can borrow up to 45 percent of their GDP. However, developed countries’ repayment capacity is higher because their tax collection is also higher.”
The revenue board chief also said, “Although the NBR has reduced the tariff on the import of dates by Tk 60 per kilogram, the prices are still too high in the market.”
Similarly, he said, “The NBR has reduced duties by at least Tk 50 per litre on soybean oil, as well as on the import of rice, eggs, sugar, potatoes, onions, and pesticides to stabilise the market.”
Commerce Adviser Sk Bashir Uddin said, “The Hasina government distributed smart cards to 1 crore families, but there were many anomalies, as some families even received three cards despite not needing them.”
“After scrutiny, currently 57 lakh smart cards are valid for selling TCB goods at lower prices. Nearly 25 lakh smart cards may show anomalies if further investigation is conducted,” he added.
“The government has been working to give 1 crore cards to one crore genuine beneficiary families, even in rural areas,” he said.
He also said that the prices of essential commodities are lower in international markets, but in Bangladesh, the prices are still high.
The adviser also said that they buy Tk 12,000 crore worth of commodities from both local and international markets through floating tenders in a year to sell to consumers at a lower price.
Md Hasan, managing director of CityGroup, said local importers face a lot of losses because of the Tk 2 difference in the dollar exchange rate, which the government should also notice.
The higher freight charge is another cause for price hikes in domestic markets, as Bangladesh does not have the logistics, like mother vessels.
AHM Ahsan, chairman of the Bangladesh Competition Commission, said the commission has settled 52 out of 102 anti-competition cases so far. But almost all the cases are now pending with the High Court for a verdict.
Moinul Khan, chairman of the Bangladesh Trade and Tariff Commission, said, “We have discussed with the traders and they have confirmed to us that the price of edible oil will not increase during Ramadan. The current price will remain the same.”
He also said that the price of sugar has decreased. Although the tariff on dates was reduced before last year’s Ramadan, its benefits were not much realised.
However, this time the government has taken measures in advance. The dates will be cleared from the port before Ramadan, he added.
The government has taken all necessary measures to keep the prices of food products affordable during Ramadan, Khan further said.
Brigadier General Mohammad Foyshol Azad, chairman of the Trading Corporation of Bangladesh (TCB), said that many consumers are still unaware of the subsidised products offered by the TCB.
He said that last year, the TCB purchased products worth Tk 3,500 crore and this year, they plan to purchase more products compared to the previous year.
Umama Fatema, spokesperson for the Anti-Discrimination Student Movement, said that for the past five or six months, they have been observing that the prices of essential goods are increasing.
“We need to verify why the prices are rising now. The government must have a proper and comprehensive plan to solve the issues the country is facing,” she said.
“We do not know what the prices of goods will be like during the upcoming Ramadan,” she added.
“In the past, we have seen that the prices of essential products increased in anticipation of Ramadan. The government needs to ensure proper supervision in this regard,” she said.
Sabbir Hasan Nasir, managing director of Shwapno, a subsidiary of ACI Limited, said, “If the VAT is increased further, customers will shift from the formal market to the retail market, where there is no VAT.
“But we will have to pay 5 to 7.5 percent VAT now. As a result, customers will move to the retail market. This way, businesses are being discouraged. We are concerned about the consumers,” he said.