Setting the prices of produces would not rein in the spiralling prices of essentials, said Commerce Secretary Tapan Kanti Ghosh yesterday.

He said this at a seminar styled "Impact of syndicate and competition on price of essentials" organised by the International Business Forum of Bangladesh (IBFB).

Recently the government put a  price cap on 29 commodities that exists on paper only: most of the items are selling at prices much higher than those fixed by the government.

"From my experience over the last three years, I think that fixing the price will not solve the problem because there are so many suppliers here," he said while calling for making the Bangladesh Competition Commission (BCC) more effective in regulating the market.

Ahasanul Islam Titu, the state minister for commerce, differed with Ghosh about the efficacy of price caps.

"It cannot be said that fixing the price of products does not work at all -- in some cases, it works," he said, citing the case of soybean oil, which is selling at the rate fixed by the government before Ramadan.

The interests of both consumers and producers should be protected, said Mohammad Helal Uddin Ahmed, a professor at the University of Dhaka's economic department, while presenting his keynote paper.

"Protecting the interests of one party will not stabilise the market."

The market will function properly if it is operated based on the law of demand and supply, which protects both the interests of consumers and producers, he added.

"We have no information about the real demand of a product in the market," said AHM Shafiquzzaman, director general of the Directorate of National Consumers Rights Protection.

There are many invisible factors in the market, which do not work according to the theory of economics.

"That should also be understood," he said, citing the case of brinjals to further his point.

Despite adequate supply, consumers have to buy the vegetable at exorbitant prices, Shafiquzzaman said.

All price hikes are not the result of merely market syndication, said Hafizur Rahman, a BCC member.

"Behind the price increase, there are various reasons," he said, adding that the BCC takes measures when it detects syndication or any malpractices to make the market unstable.

Humayun Rashid, president of IBFB, suggested arresting extortion, improving the supply chain and distribution system and ensuring strong coordination among the ministries concerned for preventing syndicates.