Over the last couple of weeks, prices of almost all daily essentials have shot up in kitchen markets across Bangladesh, causing immense suffering for people with fixed income, who are already struggling due to the economic slowdown caused by the Covid-19 pandemic. According to a report published by this daily yesterday, sugar price has gone up by 11 percent, fine flour price rose by 9-13 percent, onion price by around 50 percent, and egg price by around Tk 10 per dozen—and these are just a few examples.

The rising demand for commodities at a time when supply chains are yet to fully recover from the pandemic is one factor that is leading to the price hikes. Another reason that traders give for charging extra for these essential commodities is their increased prices in the international market. However, according to the president of the Consumers Association of Bangladesh, prices of many of the items have risen much more in the local market than in the international market. This means that traders are just using the excuse of higher prices in the international market to charge people more, he further added.

The government should immediately look into this and punish the errant traders for trying to exploit consumers by violating the government-fixed prices for these items. At the same time, the government should look to stem the ongoing slow depreciation of the taka against the US dollar, which is increasing the import cost of different commodities. According to economists, Bangladesh always remains vulnerable to import-induced inflation because of its reliance on external markets for key commodities. As a result, the only way for Bangladesh to get out of this vicious cycle—which also includes depending on other countries to make sound financial decisions, which often backfires—is to develop its own supply chains for certain essential commodities. In fact, this is something that should have already been done by now, or at least attempted.

Nevertheless, as an immediate remedy, the government should look to sell some of these essential commodities in the open market to bring down their prices. It should also provide some essential commodities from its own stock to people who are struggling in the form of government aid—or subsidise their costs—and take urgent steps to ensure compliance with its price rates in the retail market. For the long run, the government should formulate its macroeconomic policies more carefully, as some analysts have predicted that there will be substantial inflationary pressure coming from the ongoing global economic instability, as the world continues to try and recover from the Covid-19 pandemic.