Don’t normalise Ramadan price gouging

Bangladesh's battle against Ramadan price gouging is a story that never gets old. With this year's fasting month days away, it is hardly surprising that concerns over prices are already materialising into reality despite assurances and warnings, including by the prime minister, who on Wednesday vowed "stern action" against anyone involved in inflating prices. According to one report, multiple price shocks have sent consumers reeling, and things may go from bad to worse when the new electricity prices—representing a 7-10 percent jump from a year earlier—come into effect. With the exception of a few, prices of many Ramadan staples including dates, chickpeas, moshur daal, rice, sugar, onion, eggs, and all varieties of meat have seen an increase.

What this means for the lower-income groups, already under tremendous pressure to cover rising expenses with their mostly stagnant income, need not be elaborated. A holy month revered for its messages of restraint, spiritual awakening, and sharing food and joy need not be the cause of renewed suffering for the financially vulnerable. The question is, why is the government failing to control prices despite supposedly enhancing market monitoring, shoring up essential supplies, and reducing import duties on some items? The government would push the ball in the court of traders and importers. And for the most part, it would be right. We have often seen businessmen inflate prices through hoarding and various other dishonest and manipulative practices.

But there are other forces as well. At a recent meeting organised by the FBCCI, the country's apex trade body, business leaders have identified four major reasons for the surge in prices including dollar crisis and its increased rate, extortion, syndicates controlling the supply chain, and still-high import duties. Importantly, they said that traders are forced to pay money to extortionists at multiple stages while bringing a product from grassroots to the wholesale markets. Even after buying from wholesale markets, retailers also have to pay to secure their release. Apart from extortion, traders also blamed the middlemen, saying a product changes hands at least four times before coming to the wholesale markets. Due to the presence of the middlemen, its prices may increase abnormally.

These issues are not unknown, nor can they be swiftly addressed, but for an all-powerful government with its finger on every market force available, it shouldn't be a herculean task either. It can indeed take stern action against those politically connected extortionists, middlemen and syndicate members destabilising the market for their own narrow interests—if it chooses to. That will go a long way towards bringing down prices for ordinary consumers.