Benchmark rice prices to be set to crack down on manipulators

Highlights:

• Benchmark prices to be based on quality and varieties of rice
• Traders who will sell rice above those prices will be punished
• Ministries to strengthen monitoring to stabilise market by preventing middlemen, manipulators

To crack down on rice market manipulators, the commerce and food ministries have agreed to fix benchmark prices across wholesale and retail levels.

According to the agreement, violators, including traders and middlemen, will face punitive action if found selling rice above these prices.

The decisions came at an inter-ministerial meeting chaired by Finance Minister Abul Hassan Mahmood Ali at the Secretariat yesterday, several officials involved in the process told The Business Standard.

The ministers for agriculture, food, and fisheries and livestock, the state minister for commerce, the Bangladesh Bank governor, and secretaries of the ministries concerned were present at the meeting.

In the meeting, State Minister for Commerce Ahsanul Islam Titu proposed setting benchmark prices to control the rice market. He mentioned that in the context of the unusual increase in rice prices, despite conducting drives, no punitive action can be taken against wholesale and retail traders.

"To prevent manipulation in the rice market, benchmark prices should be determined based on their quality and varieties, setting the trading price at the wholesale level and the maximum retail price (MRP) for the retail level," the state minister was quoted by an official as saying.

"If a trader sells rice at a higher price than the fixed price or tries to increase the price through manipulation, disciplinary action can be taken against him. Since there is no benchmark price now, no action can be taken against any trader who increases the price," he added.

In the meeting, the food ministry agreed with this proposal, but no decision has been taken regarding when and in what manner the benchmark prices will be determined, said an official of the Finance Division who was present at the meeting.

The official added that the food ministry will hold a separate meeting with the commerce ministry to determine the benchmark prices at the wholesale and retail levels.

In the meeting, the ministers and secretaries of the agriculture, food, and fisheries and livestock ministries presented information about the production and stock of sufficient products.

Governor Abdur Rouf Talukder said the opening of letters of credit (LCs) for eight daily essential products, such as oil, sugar, and pulses, has increased by 10%-15% during the July-January period compared to the previous year.

Finance Minister Mahmood Ali and State Minister for Commerce Ahsanul Islam wanted to know the reasons for the unusual increase in prices of various daily commodities, including rice, in the market despite having sufficient production and stock. The meeting discussed the role of middlemen and traders in the unusual increase in the prices.

It was decided that the relevant ministries will strengthen monitoring activities to stabilise the market situation by preventing middlemen and manipulators.

The food ministry stated that there is no shortage of rice in the market and there is no need to import rice. Some corporations have overstocked paddy and rice. The campaign against hoarders across the country will continue.

Although there are only a few varieties of rice in Bangladesh, the meeting decided to take action against the brands involved in the sale of many well-known rice varieties in the market.

At the end of the meeting, the finance minister told reporters that there is no shortage of products. However, some entities try to destabilise the market.

"The government will be vigilant against them. We will take disciplinary action if necessary. However, the situation has not yet developed to warrant disciplinary action against traders," he added.

"The price of rice has already started to decrease, and it will decrease further. If necessary, rice will be imported," the finance minister asserted.

Fisheries and Livestock Minister Md Abdur Rahman said, "We will take strict measures against market manipulators. In addition to legal action, licences will be scrapped, and clearance will be stopped. In the near future, there will be an easing in the market."

Abdur Rouf Talukder said LC openings for the import of daily essentials have increased compared to the same period last year. Therefore, the allegation that the import of daily commodities is disrupted due to a dollar crisis is not true.

"If middlemen do not manipulate the market, there will be no problem," he asserted.