THE prices of essential commodities have been behaving rather erratically for about two years. There was an uptrend in prices in the latter part of the fiscal 2003-04 but the situation deteriorated fast following a devastating flood in the months of July and August of fiscal 2004-05. Since then in spite of abundant supply of most essentials, the consumers are being made to pay through their noses. When the consumers as well as the media have pointed their accusing fingers at traders, the latter always pleaded innocence and cited a host of factors -- including hike in commodity prices in the international market, extortion and rising cost of transportation, responsible for price escalation -- in the local market. And the government, much to the dismay of the consumers, has done nothing to rein in soaring prices and punish the traders responsible for price manipulation. There have been changes of guards at the commerce ministry in last three years but with no tangible results.
Failing to take any effective against the unscrupulous traders, the government, on a few occasions in the past, had to fall back up on the old mechanism of market intervention, a practice that went against the basic principles of free-market economy. But constrained by both resource shortage and lack of required infrastructure, the intervention mechanism failed to create any impact on the price situation. In spite of a considerable cut in the duty rates on essentials in the budget for the current fiscal, their prices have been rising unabatedly. The only exception is sugar; its prices have declined to a reasonable level. Consumers are now bracing for yet another round of hike in prices on the eve of the coming month of holy Ramadan.
Meanwhile, the government, according to a report published in this daily last Monday, has decided to conduct 'Open Market Sale' (OMS) of rice from the first day of the next month across the country through 13,500 dealers to be appointed by it. The food ministry intends to continue the operation until the next Aman harvest. It is, no doubt, a good move in the backdrop of a rising trend in the prices of most varieties of rice in the market for the last few weeks. The hike in the prices of rice has again proved the basic economic theory of 'demand and supply' wrong in the case of Bangladesh. The country this year had a bumper Boro harvest. Yet there was no impact on its prices in the market. Instead, within a few weeks after the harvesting season, the prices of the same recorded a rise without any tangible reason.
During the lean period of every year, the prices of rice generally go up, causing sufferings to the poor and low income people. Under the circumstances, the timing of the government's intervention through the OMS operation seems to be perfect. But success of the operation would largely depend on the efficiency of the food department and honesty of the government-appointed dealers. In the past, there had been a lot of allegations against the dealers who were given the responsibility of selling rice to the poor and the needy at fair prices. The government must not appoint dealers on political considerations for the sake of achieving the goal of helping the poor consumers. Any deviation from the right course is likely to cause more damage to the reputation of the ruling alliance in an election year. The OMS operation needs to be conducted under strict supervision and monitoring.