Top News

Millions of takas in fines over thousands of drives in 20 days fail to calm rice prices

15 February 2024

Businesses and leading consumer rights groups argue that enhancing supply, not levying fines, is the key to maintaining affordable prices

In a sweeping crackdown on price gouging, millions of takas in fines imposed during thousands of enforcement actions over a 20-day span starting Jan 21, but these efforts to stabilise rice prices in Bangladesh after an unusual surge have fallen short.

After experiencing an abnormal price increase of up to Tk 6 per kilogram—even during the harvest season, when prices typically fall—the maximum reduction achieved was merely Tk 3 per kilogram.

The spike in prices coincided with the general elections, prompting the newly re-elected Awami League government to take immediate action.

Prime Minister Sheikh Hasina herself issued stern warnings against price gouging, threatening imprisonment for traders caught hoarding, especially rice, during mobile court operations.

Before an emergency meeting of the party on Jan 22, she acknowledged the price hikes, but added a sudden hike after the party’s election victory is both abnormal and suspicious.

Food Minister Sadhan Chandra Majumder, retaining his position in Hasina’s cabinet, attributed the price hike to traders exploiting the government’s election-focused diversion to inflate rice prices.

He gave the millers, merchants and wholesalers four days to normalise the situation in a meeting on Jan 17.

After the end of the deadline, the government launched mobile court drives at mills, warehouses and wholesale markets to prevent hoarding, price manipulation and other sorts of irregularities.

The traders were fined a total of over Tk 12.8 million in 3,370 drives until Feb 11, according to food ministry spokesman Md Kamal Hossain.

“The drives and monitoring are ongoing,” he told on Wednesday.

Minister Sadhan and Food Secretary Ismail Hossain did not take phone calls for comments.

Ghulam Rahman, chairman of the Consumers Association of Bangladesh, said fines by mobile courts have never been an effective method to control the market.

“Traders will sell rice at a higher price to make up for the fines. Ultimately consumers will suffer,” he said.

The former secretary advised the government to take steps for supply boost in order to bring down the prices.

“Prices would have fallen automatically had the government offloaded some rice from its silos. But the market remained uncontrolled because the traders know that the government does not have preparation for this.”

He also thinks jailing would be more effective than fines.

Some traders admitted the “unprecedented” fines were effective to some extent, but some others said panic among the traders might worsen the situation.

Akbar Hossain, owner of Nawab Auto Rice and Feed Mill in Naogaon, said the price of Miniket rice fell to Tk 62-65 a kg at the mills from Tk 68-70 a month ago. The price of coarse rice also decreased from Tk 52 to Tk 48.

He does not think rice prices will decrease further before the arrival of fine variety Jira Shail rice two and a half months later.

Akbar also believes imports from India may improve the situation. Rice import duty has been cut to 5 percent from 65 percent, but the duty should be lifted altogether if the government wants imports to control the market, he said.

Akbar and Nirod Baran Saha, president of Naogaon District Paddy and Rice Merchants Association, said they have never seen mobile courts slapping traders with such hefty fines.

Nirod claimed the drives were unreasonable because wholesale prices of rice did not increase much. “The wholesale price of Miniket rice is still Tk 62. It’s nothing unusual by the end of the season.”

He also claimed traders must stockpile crops once in a season. “But traders were fined for that.”

“Let’s see what outcome the drives deliver.”

Source : bdnews24