No reduction in markets after price cap on eggs, onions and potatoes were announced

Three days after the government introduced price caps on potatoes, eggs, and onions in Bangladesh, it was observed that these directives were not only being ignored but that some places were actually selling these basic food essentials at higher prices.

During a visit to the capital's kitchen markets, it was found that potatoes were still being sold at the usual price range of Tk45-Tk50 per kg. Imported onions were priced between Tk60-Tk70 per kg, while local onions were being sold for Tk80-Tk90 per kg. Additionally, eggs were available at Tk50-Tk55 for four pieces.

On Thursday, the government had set price limits at Tk35-36 per kg for potatoes, Tk64-65 per kg for local onions, and Tk144 per dozen for eggs. However, retailers in various kitchen markets criticized these price caps, arguing that they were an attempt to address the symptom of the problem rather than the problem itself.

Many retailers pointed out that reducing prices at the retail level is not feasible without corresponding reductions in the supply chain. They find themselves caught between consumer expectations and regulatory pressures.

Ali Hossen, a trader in Karwan Bazar, explained that although the government had fixed the price at Tk35-Tk36 per kg for potatoes, they couldn't purchase potatoes wholesale at this rate. They had to buy potatoes from the Shyambazar wholesale market at Tk40-Tk42 per kg, and when transportation and packaging costs were factored in, it became impossible to sell at the government-fixed price.

Shahjahan, another trader in Karwan Bazar, echoed this sentiment, saying that they were selling at higher prices because they were buying at higher prices. They highlighted the lack of monitoring at the top of the supply chain to determine why prices were rising.

Traders emphasized the existence of extensive product syndicates along the supply chain that forced them to sell at elevated prices.

Even in smaller neighborhood shops and markets, prices remained slightly higher. For instance, in Notun Bazar in Kallyanpur (Mirpur area), potatoes were being sold at Tk50 per kg, local onions at Tk90 per kg, and imported onions at Tk60-Tk65 per kg. Eggs were available at Tk50-Tk55 for four pieces in this locality.

In addition to the pricing issue, there was also a discrepancy between potato production figures. According to the Department of Agricultural Extension (DAE) and the Bangladesh Bureau of Statistics (BBS), there is a demand for 90 lakh tonnes of potatoes per year, while this year's production is reported to be 11.2 million tonnes. However, the Bangladesh Cold Storage Association contested this, claiming that production was no more than 8.5 million tons and that 20% of storage space in cold storage facilities remained empty this year. This discrepancy further complicates the potato market.

In summary, despite government price caps, the prices of essential food items like potatoes, onions, and eggs in Bangladesh remain high, with retailers citing challenges in the supply chain and the influence of product syndicates as contributing factors.