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Any fuel price hike raises the cost of everyday necessities and agricultural products and affects both food and non-food inflation since it is linked with every part of the value chain.
“It also increases transport cost as well as the production and harvesting cost, hurting farmers,” said Rizwan Rahman, president of the Dhaka Chamber of Commerce and Industry (DCCI).
He says extortion and corruption in the supply chain of the transport system increase the price that needs to be checked and stopped.
Cold chain and frozen van storage should be operational to supply vegetables to urban areas. Frozen carriages in railway can be introduced.
The chamber leader called on the government to fix inter-city transport fares for trucks and covered vans in order to reduce price distortion.
Food carriers can be given subsidies in fuel price as a support to lower the price of goods and products.
Rahman suggested strengthening the linkage between producers and retailers using virtual platforms to cut the middlemen and keep prices reasonably lower.
He says due to customs procedural delay, much time is being consumed in customs clearance resulting in the wastage of imported perishable products.
“River networks, land port infrastructure and logistics must be adequate. Seaport infrastructure for imported items such as lentils, garlic, onion and ginger and their customs clearance process must be quicker.”
“Ports must be equipped with automation for priority clearance and for storing foods for longer preservation. On highways, trucks and vans carrying essential food items should have priority movement.”
He recommended forming a strong market monitoring cell combining consumers, sellers, chamber representatives, and government officials formed.
According to Rahman, research on consumer behaviour is crucial because it helps marketers understand what influences the buying decisions of customers.
He also says all targets, projections and plans in the monetary policy, as well as the Eighth Five-Year Plan, should be revised in accordance with the new base year of 2015–16 for inflation.
The inflation target in the 8th five-year plan was 4.6 per cent based on the previous base year of FY2005-06. Since the GDP base year has changed to 2015-16 and the economy’s size and growth calculations are done using the new base year, the inflation target would be changed accordingly.
“If assessed based on the new base year, inflation target may hike.”
In order to understand the purchasing power of middle and lower income groups and expenses for essential commodities in urban and rural areas, primary periodic surveys and studies are needed.
“This will also help know the price gap of essential commodities at producers’ and retailers’ end, the trend, the cost of production, and the factors that increase the price in the supply chain,” said the DCCI chief.
“Regular and focused studies and surveys will help the government make fact-based and market-oriented decisions and policy interventions.”
(TDS)
