Volatility is a commonly used term to describe markets everywhere when the prices of the goods and services that they represent start to rise unpredictably. But the volatility in Bangladesh’s essential commodities market is perhaps a unique example in the world for its stubborn presence in the economy over the years. Markets function according to the law of demand and supply. But Bangladesh may be the exception where this law does not work. So the terms like syndicate, middlemen, racket, etc., are often used in the media to label the non-market forces behind the distortion of the essential commodities market, in particular.
The hapless consumers of the kitchen market have been experiencing the price volatilities of edible oil, spices like onion, cumin seed and green chilli; chicken, egg, to name but a few, in regular cycles. Now it is the turn of egg, the cheapest source of protein for all the income groups. According to a report carried by this paper on Saturday, at the retail level,a dozen farm-produced eggs was selling between Tk 175 and Tk 180 at the groceries depending on the grade of the eggs on Friday morning. Those of deshi, or non-farm, variety were selling at Tk 220 per dozen at some retail shops. Compared to previous weeks, it is a jump by 10 per cent in egg prices every week. This price hike of egg is at its historic high, goes the lead of a Bangla daily. So, what caused this sudden price hike of egg? There is no definite answer. Some market operators are of the view that rise in fish prices may be one reason. The consumers have been using egg as a cheaper substitute for fish. That has driven up the demand for egg thereby increasing its price in the market, they argue. However, there may also be other reasons behind the sudden rise in egg price, said some traders. For instance, the severe heatwave between April and July led to the death of many chickens, including layer hens, in the poultry farms. Also, the recent downpours and floods in different districts have caused temporary disruption in the supply of chicken and egg pushing up their prices, others noted. In fact, there is no end to similar arguments to justify the price volatility of poultry products. But none are well-substantiated to explain why the prices of egg or chicken should become so unstable overnight without rhyme or reason. However, there are also other views that do not try to discover natural causes for the sudden fluctuations in the market for chicken, egg or other essential commodities. They would rather hold certain market operators responsible for the irrational hike in prices of egg and chicken. One may recall at this point that egg and chicken prices made similar jumps by Tk30 per dozen in January and February this year. Spike in egg price was also experienced in August last year when within the span of a week it increased by Tk 20 to Tk25 per dozen. At that time, the Directorate of National Consumer Rights Protection (DNCRP) carried out drives against the alleged market manipulators as well as investigations into the unusual rise in egg price. Following those investigations and drives, legal proceedings were instituted against some big corporate firms in the poultry business. But those efforts from the government’s end did not produce any result. The big fish in the poultry market claimed to be behind the ‘syndicates’ could not be brought to book.
Also for the recent rise in the egg prices, some believe, a few corporate houses are manipulating the market and fleecing the common consumers. According to their estimate, every day they are extorting an additional amount of Tk170 million to Tk170.50 million from the common customers. The president of the Bangladesh Poultry Association, Sumon Hawladar, for instance, is of the view that even if one takes the rise in prices of poultry feed into account, egg should not sell, under any circumstances, over Tk13 a piece. So, he believes, it is the big companies who own poultry farms as well as control thousands of small and marginal poultry farmers through contract farming are pulling the strings behind the scene to render the market of poultry products wobbly. These corporate houses, he thinks, are setting the prices of egg and chicken on a daily basis. The few small and medium scale, independently running, poultry farm owners are quite helpless before the power of the big companies. If that is the case, who has the power to hold these big players in the poultry market to account? Without a doubt, it is the government. But what is the government doing or saying about the issue?
The commerce minister assured the people at a recent discussion event in the city that the government has taken an initiative to amend and update the existing Consumer Rights Protection Act. Empowered with magistracy power, the DNCRP can take effective action against the market manipulators. However, in the same breath he also admitted that curtailment of the operation of a handful of companies that control the essential commodities market is also not the answer to the problem. This may throw the demand-supply chain of essential commodities into disarray causing further suffering of the consumer public. In that case, the government should support the small and marginal poultry farmers so they may have access to easy bank credit to run their business independently. At the same time, their organisations should be allowed to have their say in determining the prices of their products.
That would go a long way towards breaking the monopoly of the big corporate players or their syndicates in the poultry products market.