The average prices of essential commodities have surged dramatically, rising by up to 830 per cent from production to retail, according to a recent study by the Dhaka Chamber of Commerce and Industry.

However, the report noted that the rate of price increases varies across different regions, influenced by geographic location.

According to the DCCI survey, the price of fine rice varieties has risen by 306.93 per cent from the production to the retail level, while coarse rice varieties have increased by 215.11 per cent.

Excessive price hikes were also found for onions by 238.96 per cent, ginger by 301.33 per cent, garlic by 276.55 per cent, potatoes by 216 per cent, green chillies by 376.30 per cent and turmeric by 830.43 per cent.

The study also reviled that the ratio of the price hike for red chilli was 323.75 per cent and for salt 184 per cent.

DCCI presented the findings of the study on Thursday at an event titled ‘Food Inflation: An Analysis on Price Dynamics of Essential Commodities,’ held at the chamber’s headquarters in the city.

The study identified several factors contributing to the commodity price hikes, including increased production costs, low supply, an inefficient market mechanism, high transportation costs, and market dominance by wholesalers, which limits bargaining power.

Other reasons for price fluctuations include artificial shortages, difficulties in opening Letters of Credit, seasonal price variations, the depreciation of the taka, supply chain inefficiencies, inadequate storage facilities, and limited market access for producers.

The study also identified a lack of coordination between demand, production, and imports of essential products as the major reasons for the current food inflation.

Additionally, an inefficient market system and information asymmetry, a decline in local production, high transportation costs, and the rising costs of fertilisers, seeds, oil, medicines, and other inputs have further contributed to the inflation, it said.

To control inflation, the study suggested that the government should enhance data collection and dissemination to support effective decision-making, invest in improved transportation networks to ensure timely delivery of food items, develop more storage facilities to reduce food spoilage and wastage, and streamline the supply chain ecosystem.

DCCI President Ashraf Ahmed said that despite the significant price differences between producers and consumers, producers were not receiving fair prices, partly due to indirect costs.

He said that reducing input costs in storage, transportation, and processing could lower prices.

Ashraf stressed the need for accurate supply and demand data, along with data analytics, to guide effective policy-making.

He called for a ‘tariff calendar’ to allow importers to plan imports at lower rates during off-seasons.

Bangladesh Bank’s executive director, Sayera Younus, said that controlling inflation was the bank’s top priority, but despite recent policy rate increases, inflation has not decreased to expected levels, primarily due to non-economic factors.

She identified additional contributors to inflation, such as international market dynamics, rising exchange rates, and increased import costs, while emphasising the necessity of strong monitoring to effectively manage price fluctuations in the local market.

Commerce ministry joint secretary Saifuddin Ahmed emphasised the importance of market data analysis for developing appropriate policy guidelines.

He said that research was needed to determine actual demand, supply capacity, production capacity, seasonal demand, and variations.

He proposed the establishment of annual statistics based on a ‘product calendar’ to streamline the government’s taxation process for imported goods and other procedures.

Bangladesh Bureau of Statistics deputy director Swajan Hayder said that price hikes often result from gaps between supply and demand.

He recommended for a separate study on the impact of transportation costs on price spirals, warning that if inflation is not contained, consumers will need to adjust or sacrifice their daily expenditures on medical and education of children, which is undesirable.