Price caps, raid threats do little to cool potato, onion, egg prices

• Potato and onion sellers were asking Tk15-25 more than fixed prices 
• Traders warn indiscriminate raids could have negative consequences
• Govt says potato production was at 1.4-1.12 crore tonnes 
• Cold storage owners claim production was not more than 85 lakh tonnes 
• Traders say the government should've assessed product shortages before setting prices

Even two days after the government imposed price caps on potatoes, onions and eggs, their prices showed no signs of cooling. On the contrary, some are even seeing price increases. 

On Saturday, potatoes were sold at Tk50 per kg, onions at Tk90 per kg, and eggs at Tk150-155 per dozen at Dhaka's kitchen markets. 

This was the market situation even after the government fixed Tk35-36 per kg for potatoes, Tk64-65 per kg for onions and Tk144 per dozen eggs. 

The soaring prices also led to rising anger levels among customers. Buyers in Dhaka were seen arguing with potato and onion sellers as they were asking for Tk15-25 more than the government fixed prices. 

A seller in the capital's Bashabo area said, "I bought potatoes from the wholesale market at Tk42 per kg in the morning. I cannot sell them at Tk35-36."

One of the sellers at Badda's Mizan store was also seen arguing with customers. 

"The price will come down in retail only when the wholesale price is reduced. There is no option to sell at this price before that," he said. 

"We can either sell at a higher rate or stop selling the product," he added.

While lauding the government's initiative, experts emphasised the need for effective implementation. They suggested taking action against market manipulators and swiftly addressing supply chain issues.

According to agricultural economist Jahangir Alam Khan, "In response to price spikes, the government can implement price controls, but it must also identify the underlying causes and responsible parties."

"If those who defy the set prices and sell at unreasonable rates aren't adequately penalised, price fixing becomes ineffective. Therefore, strict enforcement is vital for the policy to be effective."

Cat-and-mouse at kitchen markets 

The consumer rights body is conducting raids in many districts across the country and imposing fines on traders selling these essentials at higher prices. 

Seeing a team from the Directorate of National Consumer Rights Protection (DNCRP) at New Market's kitchen market, some traders hurriedly started selling at the government's fixed prices. 

Shah Alam Traders, among the shops caught selling the products at higher prices, was fined Tk2,000. Some others were fined for not having a price chart. 

However, soon after the monitoring team left, the market started selling the products at the previous higher prices and their display charts came down.

Traders said the government should have assessed product shortages and identified the actual problem stages before setting prices. They cautioned against indiscriminate raids at the retail level, as it could have negative consequences.

Majed, an onion trader of Shyambazar, told The Business Standard, "If someone sells onions at a lower price due to government pressure, they may seek opportunities to regain higher profits later."

Ashraful Alam, a wholesaler, said, "Everyone is apprehensive about future raids and fines. While prices of the commodities may drop by Tk2-3, we remain uncertain about prices going down at the government's fixed price."

Disagreement over potato production

According to various government agencies, 1.4-1.12 crore tonnes of potatoes have been produced this year, demand being for 90 lakh tonnes.

However, cold storage owners claim production this year has not been more than 85 lakh tonnes. 

They asserted that this year's potato supply in cold storage is the lowest in three years, with 20% of storage capacity remaining vacant.

Mustafa Azad Chowdhury, president of Bangladesh Cold Storage Association, told TBS, "The price set by the government is reasonable but supply also needs to be looked at. Attempts to regulate the market may fail if supply is low."

"The government should find out the correct information about production first, and work on it if there is any problem in the supply chain."

DNCRP Director General AHM Shafiquzzaman said that cold storage operators are not providing receipts for the price and quantity of potatoes. Instead, they are doing it verbally over the phone. "Potatoes must be sold through valid receipts within the range of Tk25-26 at cold storage level. 

Stating that the potato market situation will come under control within the next few days, he said "an invisible hand" has now destabilised the market.