Dhaka Chambers of Commerce and Industry (DCCI) conducted a study to understand the dynamics of the price changes of essential commodities across their supply chain and devise a mechanism for monitoring and controlling the volatile commodity market. The study reflects information from 600 respondents from 49 Districts of 8 divisions on 21 essential commodities out of which 12 products are locally produced and 5 are imported and 4 are both imported and locally produced.
AKM Asaduzzaman Patwary, Executive Secretary, Research and Development department of DCCI presented the keynote paper at a seminar titled Food Inflation: An Analysis of Price Dynamics of Essential Commodities organised by DCCI in the city on Thursday, says a press release.
The study found that due to increased production cost, low supply, inefficient market mechanism, high transportation cost and market dominance by wholesalers, limited bargaining power are few reasons behind commodity price hike. Few more reasons are also behind price fluctuation like artificial crisis, LC opening problem, seasonal price variation, depreciation of taka and supply chain inefficiency, inadequate storage facilities, limited market access by the producers etc.
Major reasons for current food inflation found are lack of coordination among demand, production and imports of essential products. Also, inefficient market system and information asymmetry, decrease of local production and high transportation cost, high cost of fertilizers, seeds, oils and medicines including pesticides and high input cost.
To control the inflation, the study came up with suggestions that the government should enhance data collection and dissemination to support effective decision-making, invest in better transportation networks to ensure timely delivery of food items, develop more storage facilities to reduce food spoilage and wastage and streamlining supply chain ecosystem.
DCCI President Ashraf Ahmed said despite the high price differentiate between producers and consumers, producers are not getting the reasonable price. Sometimes, indirect costs are involved in increasing prices, he said. If we can reduce the input cost in storage, transportation and processing stage, then the price may have come down. Moreover, he pointed out the wastages of perishable items is large and only processing can be a better solution for this loss.
Dr. Sayera Younus, Executive Director (Research), Bangladesh Bank said that inflation control is the most priority for Bangladesh Bank right at this moment. She also said that despite of increasing policy rate by the Bangladesh Bank in recent times, the inflation does not come down at the expected level and its main reason is non-economic factors. Not only that, few other factors like international market dynamics, exchange rate hike, increased import cost are also responsible for inflation, she added.
Md Moshiul Alam, Joint Chief, Bangladesh Trade and Tariff Commission, Swajan Hayder, Deputy Director, Bangladesh Bureau of Statistics, Razeev H. Chowdhury, Director DCCI and DCCI Vice President Md. Junaed Ibna Ali and members of the Board of Directors were also present.
