The price of daily necessities in the market of the country has increased abnormally over the last few years. So naturally a kind of concept has been created with the term `syndicate’ among the consumers. That is why they have always blamed the tendency of traders to make excessive profits.
An example can be said here about onions.
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When India announced a ban on onion exports till March 2024, traders in the country started hoarding onions. As a result, at the beginning of December last year, the price of onion per kg increased by about 100 taka overnight.
Government agencies raided the country’s markets to control the situation and many traders were fined. Later the price of onion decreased.
Then in recent times the prices of potatoes, chicken, beef, eggs, edible oil, sugar – even dates suddenly increased at the beginning of Ramadan. The price of good quality dates is usually out of reach of many consumers.
Consumers demand that traders syndicate and increase the prices of various products at various times.
Market analysts also agree with this demand of consumers. They say this is happening due to lack of competition in the market.
Golam Rahman, President of Consumers Association of Bangladesh (CAB), said, “A kind of “oligopoly” is working in the country’s market in terms of imported daily necessities.”
“Competition in the market is decreasing day by day due to some big companies. As a result, many small and medium traders have been expelled from the market,’ he said.
Citing an earlier study, Center for Policy Dialogue (CPD) Honorary Fellow Mostafizur Rahman said, ‘Some traders are importing goods using different trade licenses under different names.’
“So it can be said, in reality, only four to five business organizations are able to import a significant amount of daily necessities, while the documents show that more than half a hundred traders are doing business in the market”, he added.
Mostafizur Rahman also said, ‘Small and medium entrepreneurs have to face many obstacles in entering the market.’
His advice, ‘the government should look into these aspects, so that small and medium traders do not face any problem in entering the market.’
Professor Salim Raihan of the Department of Economics of Dhaka University said that the Bangladesh Competition Commission is not able to effectively control the market due to its inability to work properly.
He alleged, ‘Some business groups are involved in anti-competitive behavior, for which they take the help of influential government officials.’
Salim Rayhan’s comment, ‘Because of this, the government never takes any effective action against them.’
CPD Senior Research Fellow Taufiqul Islam Khan said, unlike big corporates, small and medium businesses are struggling to continue importing in the face of the ongoing US dollar crisis.
As a result, these big companies are gradually dominating the market, which is not helpful for the overall ecosystem.
When asked, East West University economics professor AK Enamul Haque said technological advancements have helped reduce the overall cost of materials involved in mass production.
“As a result, the average price of edible oil is kept relatively low due to the presence of big traders in the market,” he said.
So the big companies make good profit from their sales volume, not from the price per unit, said Enamul Haque.
He felt that there was no collusion in the process of the main products.
Enamul Haque comments, ‘So we can say, when each company’s market share remains constant for several years, there is tension. But the market share is not fixed in our country. So it’s hard to believe that there’s a twist here.’
“New companies are entering the market, but in a growing market like ours, it is difficult to collude,” he said.
Local industrial conglomerate Bashundhara Group and country’s largest agro-processor Pran have in recent years set up factories to process edible oil and other essential commodities.
Professor AK Enamul Haque said, market competition can be affected due to various reasons. It is therefore important to enforce competition laws to prevent companies from engaging in anti-competitive practices.
CPD’s Mostafizur Rahman suggested strengthening the Competition Commission to handle the situation.
In a recent report, the CPD said the Competition Commission should take a strong stand against cartels or syndicates and adhere to a zero tolerance policy against collusion.
They also said that the Competition Act-2012 should be amended to deal with monopolies and include specific penalties for violators of specific laws.
Mofizul Islam, the former chairman of the Competition Commission, said, ‘In order to get the desired results, any government organization must have four things: policy support, infrastructure, budget and skilled manpower. But all the four are seriously deficient when it comes to competition commissions. As a result, the commission is not able to give expected results.
He urged the government to deal more seriously with issues related to market competition.
Pradeep Ranjan Chakraborty, the current chairman of the Competition Commission, said that they agree with the observations of the experts on the commission’s activities.
He said that a project has been taken to strengthen the commission in all aspects and a proposal in this regard has already been sent to the planning commission.
If the project is implemented, it will have a positive impact on market management, he said.
Chakraborty also said, ‘Finance Department feels that it is very important to strengthen the commission considering the current market situation.’
Regarding the efforts of the Competition Commission, he said, ‘The commission has filed cases against many companies. Some of these cases have been settled with fines and others have been taken up for appeal to the Appellate Authority. Some of the remaining cases have been released only subject to observation.’
Tags: competitive consumer goods market experts
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