Consumers feel the squeeze:  Prices of all daily commodities soared in 2022

Infographic: TBS

Consumers struggled to cope with rising prices of daily commodities all through the year 2022. From rice, flour, oil to fish, meat and vegetables – prices of 56 products soared in 2022, with five of them seeing more than 60% price hike, according to the Consumer Association of Bangladesh (CAB).

The CAB, on Saturday, released a report titled "Inflationary Pressures in Dhaka Megacity in 2022" presenting a picture of commodity price rise compared to January 2022. The association listed 56 products that both general people and low-earners in Dhaka regularly eat and use.

The prices of tomatoes, carrots, beans, dry chillies and garments increased by 60.8-77.27%% throughout the year as compared to January 2022, the list shows. This increase rate ranges from 38.64-47.47% in case of ginger, green papaya, banana and green chillies.

Although this effect of price increase is not much on coarse rice, the price of premium rice increased by 17.22% and fine rice by 10.02%. During this period the prices of wheat flour and flour increased by more than 27%, which also impacted the processed food market pushing up prices of items including biscuits and cakes.

According to the CAB, the price of salt has increased by 7.59% at the general consumer level, while at the low income level, the price has increased by 28.79%. Edible oil prices also increased by around 14%.

Besides fish, meat, eggs, chicken, prices of milk, powder milk, sugar, ginger, garlic, soap, cooking fuel and mosquito coils also increased

"It is unrealistic to expect commodity prices to come down after they increase. Therefore, attention should be given to increase people's income. Special emphasis should be placed on employment," said CAB president Golam Rahman.

"Income inequality is increasing in our country. Therefore, the government should take special measures to address it. Otherwise, the crisis will only deepen," he added.

Bangladesh Institute of International and Strategic Studies Research Director Dr Mahfuz Kabir presented the report and said, "The upward trend of energy prices has contributed to the increase in commodity prices and inflation. The fuel price hike also pushed up transportation and production costs."

He further elaborated saying, the farmers use diesel in their cultivation. Fertiliser prices were also high due to increased prices in the international market and shortage of supply in the country. As a result, overall production costs have increased.

On the other hand, the volatility of the dollar market due to the Russia-Ukraine war has increased the price of imported items. The production costs for both food and non-food items have increased due to the increase in the import price of various raw materials, he said.

About the rice price, he said, "Once 50-55 mill owners were involved in increasing the price of rice. But now there is instability in the market due to two groups. On one side are the mill owners, on the other are the corporate traders of the rice market. They are competing to buy first."

He said that the rice market is now moving towards a duopoly instead of a monopoly. In this situation, the price of the product never decreases, only increases. For this reason, there should be a government policy here, he suggested.

Average inflation in Dhaka 11.08% higher than Jan 2022

Average price inflation in Dhaka megacity was 11.08% overall higher than in January 2022. It was 9.13% in the case of low income people.

According to the CAB report, the food inflation rate during this period was 10.03% overall and 7.76% for the lower income group. But non-food inflation was higher – excluding food the overall inflation was 12.32% and 10.41% respectively.

As per the Bangladesh Bureau of Statistics, however, the average inflation rate for 2022 was 7.70%, whereas food inflation averaged 7.74% and non-food inflation averaged 7.59%. The average inflation in the capital was 7.20%.

Dr Mahfuz Kabir said inflation started to pick up from February as compared to January 2022 and declined in May. It then started to increase from June. Inflation rose in August on the back of higher fuel prices. By December it again decreases slightly.

He said that the government is running various food-friendly and employment-friendly programs in the villages. Thanks to these programs, the impact on them is less despite high inflation.

"But there is no other program except OMS (open market sale) for the low income people in the city. To save them from this high inflation, they have to be provided with employment opportunities," Dr Mahfuz said

The CAB event also recommended the government to subsidise diesel to reduce the production cost of agriculture.