Blame game proved frail in containing potate syndicate and price

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Blame game proved frail in containing potate syndicate and price

News Analysis

The game of controlling potato price engages several parties which included Bangladesh Cold Storage Association (BCSA), Bangladesh Bureau of Statistics (BBS), Ministry of Commerce, Directorate of National Consumer Rights Protection, whole sellers and finally retailers. But the authority concerned is not able to contain it anyway. Recently the ministry issued permission to the importers so that potatoes available within affordable price.

According to the game the agricultural ministry has placed blame on syndicates of cold storage owners for the abnormal price hike. Consumer rights protection directorate also pointed fingers at syndicates.

The Ministry of Commerce, which has failed to supervise effectively, has also struggled to stabilise prices by increasing the supply of potatoes in the market. Despite the potato market’s instability over the past two months, the decision to import has been delayed.

Bangladesh Bureau of Statistics (BBS) claimed that the country produces around 1 crore tonnes of potatoes this year while Agriculture Extension Department (AED) claimed further that potato production was above 1.12 crore tonnes this year. According to the current estimates Bangladeshi consumers consume around 90 lakh tonnes of potatoes a year with a 5 to 7 per cent increase in demand. However, the Cold Storage Association has said since July potato production in the country has decreased and will be no more than 85 lakh tonnes.

Potatoes are currently selling for Tk65 per kg in Dhaka markets, and up to Tk70 per kg in Chattogram. This is the record high in the recent years, with the trend starting in July. The stake holders including consumer rights protection directorates, the commerce ministry, cold storage owners and traders have held multiple meetings to control the situation. As part of the game the Ministry of Commerce set the maximum retail price of potato at Tk35-Tk36 per kg. But nothing happened in curving price spirals.

Earlier the DNCRP recommended importing potatoes in early October. The government did not approve permission for potato imports that time. But it allows imports at a time when the early potato harvest in the northern part of the country is due to begin in a couple of weeks.

The commerce ministry earlier directed the district administrations to ensure sales of potatoes at the government’s fixed rate at the cold storages, according to a statement. It has asked the Deputy Commissioners (DCs) to make ensure that the popular vegetable will be sold at Tk 26-Tk 27 per kilogram from Friday.

The country regularly exported potatoes to several countries. However, potato exports in current fiscal 2022-23 stood at only 28,570 tonnes against 80,440 tonnes in the previous fiscal year.

According to the Department of Agricultural Marketing, the production cost of one kg of potatoes this year is Tk10.5, and the maximum retail price should not exceed Tk32. According to sources, potatoes are currently selling for 20 rupees per kg in India. If imported, potatoes could be sold in the Bangladesh market at a maximum of Tk30-Tk35 per kg.

The import decision potatoes has raised questions, especially since the Agriculture Ministry banned potato exports, citing a surplus in production compared to domestic demand.

 

The question that arises is, when new potatoes arrive in the market after a month, how realistic is the decision to import? Notably, the government had previously decided to import eggs, and even after a month and a half, not a single egg has been imported. Consequently, there is no guarantee that, even if the decision is made to import, potatoes will ever reach the country’s market or when they will arrive.

The price of potatoes is subject to manipulation every year, primarily occurring at the cold storage stage. Even when the price of potatoes increases, farmers find themselves without significant profits, as they typically hold their potato stocks until June, at which point they are compelled to sell at lower prices. The market begins to rise from July onwards, transferring control of the potato market into the hands of cold storage owners and dealers. They form syndicates and drive up potato prices, taking money from consumers at their will.

The weaknesses in market management, a lack of coordination between the Ministry of Commerce and Agriculture, and the absence of cooperation among market monitoring agencies are all contributing factors to the potato market falling under the control of these syndicates. It is a widely recognised fact that these syndicates are responsible for destabilising the potato market. However, the system itself is flawed, raising the question of who will dismantle these syndicates.

 

Bmirrorhttps://bmirror.net/
businessmirror20@gmail.com

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