TCB commodity price hike to hit hard poor

TCB commodity price hike to hit hard poor

Economists and consumer rights activists on Wednesday criticised the government for increasing the prices of soya bean oil and red lentil sold by the state-owned Trading Corporation of Bangladesh at subsidised rates through the open market sale scheme for the poor.

The logic of officials of the commerce ministry and the TCB that the prices were increased because of the price hike of the commodities on the international market and the suspicion of illegal marketing of the OMS goods are not acceptable as the government has failed to monitor the essential commodity market, they said.

They also said that the poor who were struggling to maintain decent meals amid income losses due to the Covid pandemic would be hard hit after the price of soya bean oil sold at TCB’s OMS outlets was increased to Tk 110 a litre from Tk 100 and the price of red lentil to Tk 60 a kilogram from Tk 55.

The poor are the main consumers of the TCB goods, demand of which have grown sharply in the past six months, said OMS operators.

The TCB also sells onions and sugar along with Soya bean oil and red lentil at subsidised rates through its dealers at 400 to 450 spots throughout the country with an aim to contain the price spiral of the commodities on the market.

But the government has failed to keep any control on the commodity market, said former Bangladesh Bank governor Salehuddin Ahmed.

He said the government was giving too much priority to the demands made by commodity businesses.

In late October, the prices of rice witnessed a fresh increase on the market in Dhaka a day after agriculture minister Abdur Razzaque had suggested that people should eat less rice to keep the prices of the staple normal.

Not only the prices of rice and edible oils but also the prices of many other essential daily items, including atta, sugar, onions, egg, chicken and vegetables increased sharply, hurting the poor.

None of the agencies responsible for market monitoring functions properly, said Consumers Association of Bangladesh general secretary Hymayun Kabir Bhuiyan.

The government decision to increase the soya bean and red lentil prices would victimise the poor, said Hymayun, adding that the poor have already faced income losses due to the protracted Covid pandemic.

There has been a rush of consumers for the OMS products for the past six months.

A big gap between the subsidised prices of the OMS goods and their prices on the market is the main reason for the high demand at OMS outlets, said TCB spokesperson Md Humayun Kabir.

He said that many people who could afford buying soya bean oil at the market prices of more than Tk 155 a litre also rushed to OMS outlets.

The big gap between the prices has also made the TCB suspicious about possible illegal marketing of the edible oil meant for the OMS, said TCB officials.

They said that the TCB had highlighted the illegal marketing issue in its proposal sent to the commerce ministry seeking the upward adjustment of the prices of soya bean oil and red lentil.

Salehuddin Ahmed said that the government should try alternative options like engaging the police and intelligent agencies to check possible illegal marketing.

A survey conducted in April by the Power and Participation Research Centre and the BRAC Institute of Governance and Development found that some 40 per cent of the poor population and 35 per cent of the vulnerable non-poor had already reduced their food consumption to cope with the Covid outbreak and its impacts.

Even a penny matters for the poor, said former World Bank Dhaka office chief economist Zahid Hussain.

He said that most of the poor were deprived of the benefits of stimulus packages given by the government to tackle the Covid pandemic fallouts.

TCB officials said that the growing trade gap of the agency because of selling commodities at lower prices against higher buying prices had also forced the government to increase the prices of Soya bean oil and red lentil.

They said that the TCB trade gap grew to Tk 400 crore in financial year 2020-21 from Tk 80 crore in FY 2019-20.

The TCB officials said that the agency was yet to receive any subsidy from the finance ministry against the trade gap of Tk 400 in the past financial year.