Home Bangladesh BD does not get benefit of lower in price of goods in int’l market
Bangladesh - 4 weeks ago

BD does not get benefit of lower in price of goods in int’l market

Mahfuja Mukul : The rate at which the prices of daily commodities have decreased in the international market has not affected the market of Bangladesh. The main reason for this has been identified as the large devaluation of the taka against the dollar. A rise in the value of the dollar has increased import costs. As a result, the price of the product has also increased.
Part of the decline in commodity prices in the international market is due to the devaluation of the taka. In addition, due to the war in Russia and Ukraine, the supply of goods has been interrupted, and the price of energy, electricity and gas has increased in the country’s market. Besides, the weakness of the market system has also contributed to the increase in the price of the product. This information was found in the report of Bangladesh Bank.
According to Bangladesh Bureau of Statistics (BBS) report, the cost of purchasing daily goods and services including food has increased due to the increase in commodity prices. In February last year, inflation was 8.78 percent. Last February it was 9.67 percent. In other words, this rate has increased in February of this year compared to February of last year.
Although up from last December, down slightly from last January. Meanwhile, the twelve-month average inflation rate is rising. Last February this rate was 9.66 percent. The average inflation rate is increasing due to the adjustment of last year’s high inflation.
According to sources, in April 2022, the price of the dollar was Tk85. According to the central bank, it has now increased to Tk 110. But the price of import in the market is on average Tk122 to Tk124 per dollar. A month ago, it rose to Tk127. According to this, the value of money has decreased from 30 percent to 48 percent. At the same time, due to the dollar crisis, most of the goods are being imported through loans. Loans are being taken in two ways. Loans are being taken from banks of the country. Goods are being brought from foreign countries by borrowing dollars. Interest rates have increased in both markets. Against the import loan now more than 13 percent interest has to be paid. Earlier it was 9 percent. Interest on foreign loans used to be 4 to 5 percent. Now it has increased to 8 to 9 percent. On the one hand, the dollar has to be bought at a higher price. On the other hand, interest on domestic loans is 4 percent higher than before. Interest on foreign loans is almost twice as much as before. The cost of importing products is increasing. Which has a negative effect on the price of the product.
Due to shortage of dollars in the market, goods cannot be imported as per demand. As a result, there is a supply shortage on the one hand, and on the other hand, stocks are decreasing. This is also contributing to the increase in the price of the product. However, the dollar price and loan interest rates are playing a major role in increasing commodity prices. Due to these reasons, the cost of imports has increased and this has affected other domestic industrial products as well. Besides, the production cost of all types of products has increased due to the increase in the price of fuel oil, gas and electricity in the country’s market.
Due to increase in dollar price, loan interest, gas, fuel oil and electricity prices, the prices of products have also increased more than expected. On the occasion of fasting, the taxes of four products have been reduced, but the prices of these products have not decreased much.
Meanwhile, prices of almost all products including daily commodities have decreased in the international market. Among them, the price of soybean oil has decreased by 52 percent, the price of wheat by 36 percent, the price of sugar increased by 18 percent until last October and has now decreased by 9 percent. The price of palm oil fell by almost 50 percent. But its price has increased in the country’s market. Earlier, bottled palm oil was Tk 145 per liter. Now it has increased to Tk158. But at that time Palm oil tax was reduced. The price of fuel oil in the international market decreased by 36 percent and now increased by 9 percent. Due to the higher rate of decline, ship fares have decreased. This should reduce the price of the product further. But that didn’t happen.
They have identified one more reason behind the price of products not falling in the domestic market in coordination with the international market. That is weakness in market management. There is no framework for the impact of the price of any product in the international market on the country’s market. Due to which the price of products in the domestic market is not properly coordinated with the international market.
According to the sources, on the one hand, the prices of the stocked products are being adjusted in determining the prices. But showing that there is no stock, the price is increased by reducing the supply. It is not taken into account. As the price increases in the international market, it increases in the domestic market. But even if it decreases, it does not decrease even within a month.

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