The average prices of essential commodities have surged abnormally, increasing by up to 830 per cent from production to retail level, according to a recent study by the Dhaka Chamber of Commerce and Industry.
However, the study found that the rate of price hikes varied across different divisions, depending on geographic location.
According to the DCCI study, the price of fine rice varieties has risen by 306.93 per cent from the production to the retail level, while that of coarse rice varieties has increased by 215.11 per cent.
Excessive hikes were also found in case of onions鈥� price, which rose by 238.96 per cent, that of ginger by 301.33 per cent, garlic by 276.55 per cent, potatoes by 216 per cent, green chillies by 376.30 per cent and turmeric by 830.43 per cent.
The study also revealed that the rate of price hike for red chillies was 323.75 per cent and that of salt 184 per cent.
The DCCI presented the findings of the study on Thursday at an event titled 鈥楩ood Inflation: An Analysis on Price Dynamics of Essential Commodities,鈥� held at the chamber鈥檚 headquarters in the city.
The study identified several factors contributing to the commodities鈥� price hikes, including increased production costs, low supply, inefficient market mechanism, high transportation costs and market dominance by wholesalers, which limited bargaining power.
Other reasons for price fluctuations include artificial shortages, difficulties in opening letters of credit, seasonal price variations, depreciation of the taka, supply chain inefficiencies, inadequate storage facilities and limited market access for producers.
The study also identified a lack of coordination between demand, production and imports of essential products as the major reasons for the current food inflation.
Additionally, an inefficient market system and information asymmetry, a decline in local production, high transportation costs and rising costs of fertilisers, seeds, oil, medicines and other inputs have further contributed to the inflation, it said.
To control inflation, the study suggested that the government should enhance data collection and dissemination to support effective decision-making, invest in improved transportation networks to ensure timely delivery of food items, develop more storage facilities to reduce food spoilage and wastage and streamline the supply chain ecosystem.
DCCI president Ashraf Ahmed said that despite the significant price differences between producers and consumers, producers were not receiving fair prices, partly due to indirect costs.
He said that reducing input costs in storage, transportation and processing could lower prices.
Ashraf stressed the need for accurate supply and demand data, along with data analytics, to guide effective policy-making.
He called for a 鈥榯ariff calendar鈥� to allow importers to plan imports at lower rates during off-seasons.
Bangladesh Bank鈥檚 executive director Sayera Younus said that controlling inflation was the central bank鈥檚 top priority, but despite recent policy rate increases, inflation had not decreased to expected levels, primarily due to non-economic factors.
She identified additional contributors to inflation, such as international market dynamics, rising exchange rates and increased import costs, while emphasising the necessity of strong monitoring to effectively manage price fluctuations on the local market.
Commerce ministry joint secretary Saifuddin Ahmed emphasised the importance of market data analysis for developing appropriate policy guidelines.
He said that research was needed to determine actual demand, supply capacity, production capacity, seasonal demand and variations.
He proposed establishing annual statistics based on a 鈥榩roduct calendar鈥� to streamline the government鈥檚 taxation process for imported goods and other procedures.
Bangladesh Bureau of Statistics deputy director Swajan Hayder said that price hikes often resulted from gaps between supply and demand.
He recommended a separate study on the impact of transportation costs on price spirals, warning that if inflation was not contained, consumers would need to adjust or sacrifice their daily expenditures on medical and education of children, which was undesirable.
