Bangladesh people in tight spot as living and food costs rise

food price high

Prices of different essential commodities, including rice, meat, electricity, house rent and transport fare, have increased over 60 per cent in last six years pushing the cost of living up in the country, particularly in Dhaka.

The price hike and rising living cost has forced a large percentage of the country’s low- and fixed-income families into hardship.

Economists talking to New Age gave mixed opinions about the impact of the price hike of essential commodities pointing out that combined income of the people had also increased over the period.

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According to the data provided by the Trading Corporation of Bangladesh, prices of rice increased more than 60 per cent in last six years while the price of ‘atta’ increased by 45 per cent and red lentil by 18 per cent during the period.

The statistics shows the prices of beef increased by almost 60 per cent in last six years while fish prices increased by 42 per cent. Prices of most of the vegetables but potato doubled during the period.

The Bangladesh Energy Regulatory Commission has already increased retail power prices by 63.56 per cent, up from Tk 3.76 per unit to Tk 6.15 on an average, in seven phases since March 2010.

Over the period, house rent jumped about 80 per cent in the capital city. Last year, according to Consumers Association of Bangladesh, house rent increased 9.76 per cent due to non-enforcement of House Rent Control Act 1991.

The Bangladesh Railway increased passenger fares by 50 to 115 per cent from October in 2012.

Per litre diesel was sold at Tk 33 in June 2006 that rose to Tk 44 in January 2009 when Awami League assumed office for the second consecutive term. The price increased further and stood at Tk 68 since January 2013. The price of diesel thus rose exactly 50 per cent.

A report of CAB said the cost of living rose 6.82 per cent in 2014 from the previous year, mainly due to a hike in house rent, utility bills and prices of some essential food items.

Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, told New Age that the increasing prices of commodities would not affect the affordability of the people as the per capita income of the people also grew during the period. He said considering the point-to-point inflation the non-food budget was till now higher.

Economist Anu Mohammad, however, said that purchasing capacity of all sections of people could not be judged by the per capita income. ‘It is true the real income of a certain quarter has increased unusually in last six years but a large segment of the population has been forced to increase their working hours or slashing their consumption bundle to adjust to the increasing commodity prices, he said.

‘I think the rate of increase in the real income of more than 50 per cent of the people who are engaged in informal sectors is insignificant and the reality is that people have been suffering for growing commodity prices,’ Anu said.

Per capita income almost doubled in six years to $1,190 at the end of 2013-14 which was $608 in 2007-08.  Bangladesh’s annual per capita income rose to $1,044 in 2012-13 fiscal from $923 after change in the base year. But rate of inequality remained almost static in Bangladesh, said the economist on the basis of available data.

A World Bank report titled ‘Addressing Inequality in South Asia’ said Bangladesh was third among the eight countries of the region in the inequality index.

Economist Abdul Bayes said price of beef soared in recent times because of short supply of cattle. ‘Despite increasing prices, fish remained somewhat affordable for common people as their real income also increased during the period,’ he added.

Talking to New Age, a number of people who live a hand-to-mouth existence and low-income servicemen said they could not increase their income to match the price spiral of essential commodities.

A government survey has revealed that at least 39.80 per cent of the households in the country still live in food insecurity. The survey also says members of most of those households often go without food or have to borrow to meet their want of food. The Bangladesh Bureau of Statistics conducted the Welfare Monitoring Survey in March 2009.

Sabina Yeasmin, an operator of Bonni Apparels at Malibagh in the capital, said that her wages increased to Tk 7,000 from Tk 4,000 in last five years but expenditure continued increasing. ‘In 2010 I paid Tk 900 as house rent per month but now the rent for the same house has increased to Tk 2,500 per month,’ Sabina said.

She said that in the last five years the living cost increased almost four times as prices of all essential commodities went up. It has become difficult to afford the expenditure despite an increase in wage by more than 70 per cent as the family is growing in size and new needs come up every day, according to Sabina.

Changing food habits pushes up vegetables prices

The prices of most of the vegetables doubled in last six years while the price of potato remained almost static. Economists and market analysts said that the demand for vegetables had been increasing as all sections of people changed their food habits in last few years. Increasing production cost, labour wages and transport costs also pushed the prices of vegetables up, they said.

The prices of tomato, bitter gourd, okra and papaya doubled during the period of 2009-2015.

Tomato retailed at Tk 30 a kg, bitter gourd at Tk 60 a kg, okra at Tk 50 a kg and papaya at 30 a kg in March 2015, while tomato sold at Tk 16 a kg, bitter gourd at Tk 32 a kg, okra at Tk 35 a kg and papaya at 10 a kg in March 2009, according to newspaper reports.

According to the statistics of the Trading Corporation of Bangladesh, locally grown onion sold at Tk 30-Tk 35 a kg on March 31, 2015 while its price was Tk 26-Tk 28 a kg exactly six years back.

The price of imported onion increased to Tk 25-Tk 30 a kg from Tk 16-Tk 22 a kg in March 2009.

The price of locally grown garlic (newly harvested) increased to Tk 50 a kg on March 31, 2015 from Tk 24a kg in March 2009 while that of imported garlic rose to Tk 70-85 a kg from Tk 22- 26 a kg six years back, the TCB data showed.

Ghulam Rahman, president of the Consumers Association of Bangladesh, said that the price hike of vegetables in last five-six years was not unusual as the production cost had increased during the period and at the same time purchasing capacity of the people also increased.

Economist Abdul Bayes said that the demand for vegetables increased gradually in last few years as people changed their food habits. Despite growing demand, the prices of vegetables remained stable though recently the prices of some items increased due to political turmoil that disrupted transportation across the country, he said. He added that the vegetable prices would not affect the livelihood of the people as wages had increased in last couple of years.

Beef becomes dearer

The prices of beef more than doubled in last six years while fish prices increased by 42 per cent during the period. According to the data provided by the Trading Corporation of Bangladesh, the price of beef was Tk220 a kg on March 31, 2009 while it was sold at Tk350 a kg on March 31 this year, marking a 60 per cent increase in six years.

In some cases, beef was selling at Tk380-Tk400 a kg in different kitchen markets in the capital. According to the TCB data, the price of beef increased by21.82 per cent in last one year. The statistics of the Department of Agricultural Marketing, however, showed that beef was sold at Tk350-Tk 360 a kg on March 31, 2015 while its price was Tk 220 a kg exactly six years back.

Mutton sold at Tk 550 a kg in March 2015, up from Tk 350 a kg in the same month of 2009, marking 57.14 per cent increase.

The prices of free range chicken increased by 47.82 per cent to Tk 340 a kg from Tk 230 a kg during the same period. The prices of ‘rohita’ and ‘katla’ fish increased by almost 42 per cent during the period and they were now selling at Tk220-Tk260 a kg depending on their size and quality.

The price of the two varieties of fish was Tk140-Tk160 a kg in March 2009, the government data showed.

Economist Abdul Bayes said that there were reasons for increasing prices of beef and fish prices, including increasing cost of production and transportation.

The price of beef soared in recent times as cattle were in short supply, he said but hoped the price would come down soon.

Despite increasing prices, fish remained somewhat affordable to the common people as their real income also increased during the period.

Economist Anu Mohammad said that millions of working people were engaged in the informal sector and their income was unstable. ‘A large number of working people cannot afford to consume beef, mutton and fish nowadays as their real income has not increased,’ he said.

Most of the working people are forced to work extra alongside their usual trades for to survival amid spiraling prices while low calorie intake affected their productivity, Anu said.

Rice price goes up 60 percent

The price of rice increased more than 60 per cent in last six years while that of ‘atta’ rose by 45 per cent and red lentil by 18 per cent during the period.

Statistics provided by the Trading Corporation of Bangladesh showed that coarse varieties of rice sold at Tk 33-Tk 37 a kg on March 31 2015 while their prices were Tk 21-Tk 23 a kg on March 31, 2009.

Data showed that the price of coarse varieties of rice increased by 60.86 per cent in last six years.

Department of Agricultural Marketing statistics showed that coarse varieties of rice were retailing at Tk 32-Tk 34 a kg on March 2015 while their prices were Tk 21-Tk 23 a kg in March 2009.

The prices of fine varieties of ‘najirshail’ and ‘miniket’ rice increased by 64.70 per cent to Tk 48-Tk 56 a kg on March 2015 from Tk 34-Tk 37 a kg exactly six years ago, the government data showed.

The price of atta has increased by 45.45 per cent during the period. Unpacked atta sold at Tk 32 a kg in March 2015 from Tk 22 a kg in March 2009, the government data showed. Packed atta was retailing at Tk 24-Tk 36 a kg in March 2015 while it sold at Tk 24-Tk 25 a kg in March 2009.

The price of red lentil recorded a 17.64 per cent increase on an average in last six years. The price of local red lentil increased to Tk 110-Tk 120 a kg from Tk 102 a kg during the period. Imported red lentil retailed at Tk 85-Tk 90 a kg in March 1015 while it sold at Tk 72-Tk 80 a kg in March 2009.

Economists gave mixed opinions over the increasing prices of essential commodities, including rice, atta and lentil.

Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, told New Age that the increasing prices of rice and atta would not affect the affordability of the people as their per capita income had also increased during the period. He said that considering the point-to-point inflation the non-food budget was still higher.

Economist Anu Mohammad, however, said that purchasing capacity of all sections could not be measured by per capita income. It is true that real income of a certain section increased significantly in last six years but a large segment of the population have been forced to work extra hours or cut their consumption bundle to adjust to the increasing commodity prices, he said.

‘I think the rate of increase in the real income of more than 50 per cent of the people who are engaged in informal sectors are very insignificant and they are suffering for soaring commodity prices,’ Anu said.

References:

  1. New Age, April 19, 2015, “People in tight spot as living costs up” (http://newagebd.net/112842/people-in-tight-spot-as-living-costs-up/)
  2. New Age, April 19, 2015, “Changing food habits pushes up vegetables prices”, (http://newagebd.net/112840/changing-food-habits-pushes-up-vegetables-prices/)
  3. New Age, April 19, 2015, “ Beef becomes Dearer”, (http://newagebd.net/112836/beef-becomes-dearer/)
  4. New Age, April 19, 2015, “Rice price goes up by 60 percent”, (http://newagebd.net/112838/rice-price-goes-up-60pc/)