A syndicate of traders was responsible for the recent rise in prices of essential commodities like rice, onions and potatoes as it had been in control of the supplies due to weak market monitoring system.
The revelation has come to light in a recent Bangladesh Agricultural Research Council (BARC) report.
At the same time, the BARC said in absence of the government's punitive measures against this section of traders, they had been manipulating the commodity market time and again to make their fortunes at the cost of public suffering.
The BARC also blamed the failure in producing rice, onions and potatoes locally, as well as the taking of timely decisions by the departments concerned of the government to import the items as per the country's demand.
The body of the agriculture ministry made a set of recommendations, including setting up a commission on the prices of agricultural products, strictly monitoring the commodity market round the year and taking stern steps against the dishonest traders, to keep the prices of these products at normal level.
The BARC conducted the research to find out the actual reasons behind the abnormal rise in prices of rice, onion and potato in the last few years.
About the price hike of rice, the report said that almost all the farmers sell their surplus paddy within the first month of paddy-harvest. The pattern of rice sales changed due to the coronavirus pandemic in the last 'Boro' season.
In this season, farmers gradually sold their stocks of paddy, and, as a result, a crisis emerged in the market, it said, adding that a section of traders took control of the rice market in this situation.
The government also collected less rice last season and failed to import the required amount of rice in due time, the report said, adding that as a result, it was not possible to intervene in the market timely, resulting in the price of rice being pushed up across the country.
The report also said the paddy market is dominated by large mill-owners and traders and there is unequal competition in the market.
Currently, most of the paddy is collected by the millers from the farmers and as a result, they can control the market as per their own wishes.
Besides, the cost of paddy cultivation and processing has increased while seasonal traders are also increasing day by day and production has also declined due to natural disasters, and thus, the price hike of paddy.
It said the government needs to modernize the paddy-rice collection system and it would be more effective to collect paddy directly from farmers and turn it into rice through millers.
About the abnormal price hike of potatoes, the BARC report said a section of traders controlled the supply of potatoes with the hope of increasing the price in the market. Potatoes stored in the cold storages changed hands frequently, and that was another reason for its price going up.
Besides, potato exports increased in some neighboring countries thus creating a crisis of potatoes in the local market, it said, adding that seasonal traders were active in creating an artificial crisis keeping huge stocks of potatoes.
"There was also limited government control over the potato market due to lack of information," it added.
As the monsoon season drew longer, vegetable production declined and demand for potatoes as well as its price went up.
The report said India's restrictions on onion exports and over-dependency on imported onion from India and lack of prompt action to find alternative sources of onions for import were the main reasons of price hike of onion in the local market.
There was also less production of summer onion and 'Murikata' (chopped) onion in the country.
A corrupt trade syndicate took advantage of the situation and manipulated the market to make quick money. The government also failed to take quick decisions on importing onions to intervene in the market, it added.
In the recommendations, the report said unscrupulous trade syndicates must be identified and stern action should be taken against them to stop recurrence of such market manipulation in future. It also suggested taking steps for maintaining transparency in the import of essential commodities.
In addition, it suggested improving management of internal supply and stocks to control the sudden rise in prices of rice, paddy, potato and onion for the welfare of the common people.
Commerce minister Tipu Munshi said, “The present government is very much sincere about keeping the commodity market stable for the sake of common people and it would take whatever steps are needed to keep prices of essential items at a tolerable level.”
The commerce ministry is aware about the syndicate of traders who always tries to manipulate the market for their benefits, he said, adding that stern action would be taken against anyone found involved in such illegal activities.
"None will be spared if we find any syndicate trying to control commodity price for their benefits," he added.
Agriculture Minister, Dr Abdur Razzak said, “The government is always sincere in keeping the commodity market stable. As ensuring food safety is a major target of the government, the agriculture ministry has been working tirelessly at the instruction of Prime Minister Sheikh Hasina to increase food production, especially main commodity items like rice, onion and potato to keep their prices at a tolerable level for common people.”
"If the recommendations are implemented strictly and the government beefs up monitoring of the commodity market, it will be possible to control the abnormal price hike of commodities in future," said Coordinator of BARC Research Team and former Director General of Bangladesh Livestock Research Institute, Prof Dr Jahangir Alam.
BARC's Agricultural Economics Department State Statistical Officer (SSO) Dr Md Abdus Salam, Bangladesh Agricultural University Agribusiness and Marketing Department Professor Sheikh Abdus Sabur and head of the Department of Agricultural Economics at the Agricultural Research Council Abdur Rashid were in the research team of the BARC.
Prices of some commodities such as potato, onion, rice and edible oil skyrocketed during September-November of 2020. The price of a kg of potato jumped to Tk 50 from Tk 26 while onion price varied from Tk 90 to Tk 100 per kg. Onion price doubled between September 15 and September 17 from Tk 40-45 after India banned export of the key kitchen item.
Green chili which was Tk 105 per kg in August, 2020 was sold at Tk 220 per kg in September, 2020. The price of vegetables sharply rose in local markets during the period.
The price of coarse rice had gone up by Tk 3 to Tk 5 per kg. The price of a 5-liter container of soyabean oil was between Tk 515 and Tk 530 at different markets.