Market disorder causing price hikes despite duty cuts: Finance adviser

High prices of essential commodities, despite reduced import duties, are due to "chaos in the market", according to Finance Adviser Salehuddin Ahmed.

 Speaking at a discussion organised by the Palli Karma-Sahayak Foundation (PKSF) today (13 November), he noted that while the National Board of Revenue (NBR) has lowered taxes on staples like eggs and cooking oil, prices have yet to decline.

"The market has become so disorderly that people are saying prices are not dropping, despite the facilities NBR has provided," he said.

Salehuddin, who briefly led the Ministry of Commerce, acknowledged public frustration over rising prices.

"I visited Karwan Bazar and spoke to traders. Despite tax reductions, essential items remain expensive," he said, adding that addressing these issues requires more than just actions by the commerce ministry.

"People are struggling; they go to the market with Tk500 and can barely buy a handful of vegetables," he said, citing the lack of well-functioning institutions as a significant challenge in stabilising the economy.

Salehuddin said the interim government aims to initiate short-term reforms, leaving a legacy of good work that future governments could build upon.

"We aim to leave a footprint of transparency and accountability so that any future government can continue these initiatives for the benefit of the public…Even after we are gone, we hope the public remembers our work," he said, adding that sectors like banking and financial institutions require immediate reforms for order and trust to be restored in them.

The adviser shared insights from his recent participation in the World Bank-IMF annual meetings in the United States, where he sensed a strong willingness among international stakeholders to support Bangladesh's economic recovery.

"Those we spoke to were all positive. The conditions they set are not overly stringent," he said, adding that both multinational and bilateral organisations have extended their support.

Reflecting on PKSF's role, Salehuddin Ahmed praised the organisation for its transparency and accountability, qualities he said are essential for implementing low-cost programmes that genuinely benefit the population.

"PKSF is a world-class institution with the capacity and reputation to lead impactful initiatives," he said, urging the Microcredit Regulatory Authority to adopt a more supportive stance toward PKSF's partner NGOs.

The adviser stressed the importance of the agricultural and labour sectors in the country's advancement, lamenting the fact that farmers and workers often go unrecognised.

"They play a significant role, yet they are frequently left in the background," he said.

PKSF Managing Director Badiur Rahman, speaking on the occasion, noted that PKSF has built a solid foundation for organisational stability, stressing the need to integrate science and information technology into PKSF's interventions.

PKSF Chairman Zakir Ahmed Khan also called for continued innovation, stating, "We should not be complacent; we must discover new solutions, innovate and conduct research."

He expressed gratitude to PKSF's development partners, government officials, partner organisations, and grassroots members.

In his welcome speech, Acting Managing Director Md Fazlul Kader noted the PKSF flourishing under the leadership of Dr Muhammad Yunus, highlighting its commitment to financing self-employment initiatives.

"In 2003, we added technical assistance to our strategy to combat poverty more effectively," he said. 

Price hikes and recent market trends

 Notably, despite the government's duty cuts on rice, onions, potatoes and edible oil, price hikes in recent months have further strained low-income families.

Potato prices have risen by Tk10-15 per kg, rice by Tk4-5 per kg, soybean oil by Tk10-12 per litre and local onions by Tk25-35 per kg. Food inflation has followed an upward trend, reaching 12.66% in October after rates of 11.36% and 10.40% in August and September, respectively.

Businessmen attribute the increase in potato and onion prices to seasonal shifts and excessive rain, which has reportedly damaged supplies.

Mill owners note that rice prices tend to rise around this time each year due to lower paddy stocks, although prices may ease with the ongoing Aman paddy harvest.

Salehuddin Ahmed called on everyone to work together to address these market issues, urging patience as the interim government implements its short-term reforms for economic stability.