Profiteering during Ramadan

If not price control, there should be strict market monitoring and regulatory action so that traders cannot fleece the buyers amid the binge

Every year the holy month of Ramadan faces price hike of  almost all commodities including the daily necessities even if the supply conditions are satisfactory. It has become a custom with the country’s business people to devour profit in the month of Ramadan. Worst of all the prices of commodities once raised in this month become a new level of hiked prices that do scarcely come down even after the end of Ramadan. Consequently, prices of almost all commodities settle at a new hiked level for all time to come.    
There is no denying that businesses are the lifeblood for the economy and that profit is the motive force of trade and business in market economy or the economy in the capitalist system. Subsistence or consumption-based economy under socialist system has no problem in sustaining sans profit. But profiteering is a crime in any economy – be it market-driven or controlled. So, economists are of the view that the government must act to prevent big-business hoarding and profiteering, no matter whether one speaks of market economy. 
What we see is usually in the present market sugar tastes sour, meat prices mind-boggling. Beef, mutton, chicken seem contraband for the commoners. Fish? It is also hard to make a menu for them. These are necessary animal proteins. Chickpea or gram and fried rice, dates and sherbet are traditional items for breaking day's fast in the holy month of Ramadan. These Ramadan essentials also look to be luxuries for many of this poor country. Cow meat costs Tk 400 and above a kilogram, mutton is far dearer. Prices of farm chickens, which would somehow find a place in poor persons' dishes sometimes, have leaped up. Local or country chickens are hardly affordable for the middle-class ones even. Among fishes, even cultured rui sells at Tk 300 or beyond per kilogram. Small fry are dearer yet. 
Among Ramadan's Iftar necessities, sugar needed for sherbet found a quantum jump in prices - up to Tk 60 per kilogram. It could create a sweet crisis of price spiral beyond this mark but for the commerce ministry's intervention and warning of action against profiteers. There are also gimmicks with the main staple-rice. When farmers harvested paddy, its market prices hit a rock bottom. Big businesses and rice millers were blamed for market manipulation. Amid an outcry from the peasants themselves, the government used its weapon – SRO (statutory regulatory order) – to slap a duty hike on rice import to raise its internal market price. 
Additionally, the government decided to export coarse rice, too, after limited trial with aromatic fine varieties. Traders now take the aroma of aromatic rice, costing the consumers above Tk 100 a kilogram, while normal rice that middle-class people live on is priced Tk 50 or above per kilogram. Similarly, when sugar prices were far below production cost at government-owned sugar mills, the government raised duty on sugar import by the regulatory order to jack up its prices. Big players on the domestic market began playing with both the government measures of market intervention to cash in on the SROs. 
Both apparently boomeranged – the producers i.e. the poor farmers gained little while millers and wholesalers went on feasting on consumers' woes. What should be done now? Mere market monitoring and raids on sellers' places and fining them may not work wonders in respect of taming the wayward market, when “syndicates” of tycoons are at play. At last on June 09, 2016 meeting with businesspeople the government warned traders against manipulating commodity prices during the month of Ramadan, when the items mentioned above are hugely consumed. The Commerce Minister told the businessmen during the discussion on the market situation at the ministry "We don't want you to incur losses but want to protect consumers' interests at the same time". 
The minister said the government stresses discussions with businesses to keep prices under control rather than intervene in a market economy. Referring to the slapping of a huge fine on a sugar wholesaler in Chittagong  on June 8, 2016, the minister said others trying to extract extra profits would face similar consequences. Hajji Mir Ahmed Traders of the port city's biggest wholesale market at Khatunganj was fined by Tk 2 million for selling sugar at Tk 58 a kilogram after buying at Tk 46 from refiners. The minister accused some businessmen of creating an “artificial crisis” in sugar. He said "We all now know that wholesalers buy sugar at Tk 48. Strict actions will be taken against manipulators”. He, however, claimed that prices of all commodities, except for chickpeas and sugar, were “normal”. 
The SRO does not go with free market economy – it is certainly a market-intervention instrument in a capitalist system. If it can be used to jack up market prices, it can also be lifted when the action hits the common consumers. Apart from the consumption side, there is also fashion aspect of the month of Ramadan fasting and festivals. The Eid-ul-Fitre at the end of Ramadan is the biggest annual festival for the Muslims the vast majority people of the country. People of other faiths also try to get dressed in their best during such occasion as that is also time for holidaying. 
So, if not price control, there should be market monitoring and regulatory action so that traders cannot fleece the buyers amid the binge. Especially, the imported items need a watch over import price and marketing rates. Limited-income people have a strict limit to sparing money on fashion wears and articles. Even the bureaucrats who had fabulous pay rises also have limit to their spending capabilities if money doesn't flow in through byways. 
After all, most of the members of the business community need to keep in mind that worship is not confined to rituals. All round activities of human beings are included in it. As one worships in the mosques, eid-fields, in the field of Arafat likewise one has to worship in his way of justly performing duties in offices, businesses, courts, parliament, educational institutions, farms, mills-factories, war fields, agriculture – in a word in all walks of human working life – as per the direction of the supreme creator for obtaining His allegiance. 
Therefore, it is religiously as well as ethically binding on them not to coerce the common people by grabbing exorbitant profit from the fasting folks by taking advantage of the holy month of Ramadan. The businessmen, not by coercing the consumers, in addition to performing outward ceremonial worships, may earn Rahmat (mercy), Magferat (forgiveness) and Nazath (salvation) in  this holly month of Ramadan if they honestly desire so.       

The writer is a retired Professor of Economics, BCS General Education Cadre

 

Profiteering during Ramadan

If not price control, there should be strict market monitoring and regulatory action so that traders cannot fleece the buyers amid the binge

Every year the holy month of Ramadan faces price hike of almost all commodities including the daily necessities even if the supply conditions are satisfactory. It has become a custom with the countrys business people to devour profit in the month of Ramadan. Worst of all the prices of commodities once raised in this month become a new level of hiked prices that do scarcely come down even after the end of Ramadan. Consequently, prices of almost all commodities settle at a new hiked level for all time to come. There is no denying that businesses are the lifeblood for the economy and that profit is the motive force of trade and business in market economy or the economy in the capitalist system. Subsistence or consumption-based economy under socialist system has no problem in sustaining sans profit. But profiteering is a crime in any economy be it market-driven or controlled. So, economists are of the view that the government must act to prevent big-business hoarding and profiteering, no matter whether one speaks of market economy. What we see is usually in the present market sugar tastes sour, meat prices mind-boggling. Beef, mutton, chicken seem contraband for the commoners. Fish? It is also hard to make a menu for them. These are necessary animal proteins. Chickpea or gram and fried rice, dates and sherbet are traditional items for breaking days fast in the holy month of Ramadan. These Ramadan essentials also look to be luxuries for many of this poor country. Cow meat costs Tk 400 and above a kilogram, mutton is far dearer. Prices of farm chickens, which would somehow find a place in poor persons dishes sometimes, have leaped up. Local or country chickens are hardly affordable for the middle-class ones even. Among fishes, even cultured rui sells at Tk 300 or beyond per kilogram. Small fry are dearer yet. Among Ramadans Iftar necessities, sugar needed for sherbet found a quantum jump in prices - up to Tk 60 per kilogram. It could create a sweet crisis of price spiral beyond this mark but for the commerce ministrys intervention and warning of action against profiteers. There are also gimmicks with the main staple-rice. When farmers harvested paddy, its market prices hit a rock bottom. Big businesses and rice millers were blamed for market manipulation. Amid an outcry from the peasants themselves, the government used its weapon SRO (statutory regulatory order) to slap a duty hike on rice import to raise its internal market price. Additionally, the government decided to export coarse rice, too, after limited trial with aromatic fine varieties. Traders now take the aroma of aromatic rice, costing the consumers above Tk 100 a kilogram, while normal rice that middle-class people live on is priced Tk 50 or above per kilogram. Similarly, when sugar prices were far below production cost at government-owned sugar mills, the government raised duty on sugar import by the regulatory order to jack up its prices. Big players on the domestic market began playing with both the government measures of market intervention to cash in on the SROs. Both apparently boomeranged the producers i.e. the poor farmers gained little while millers and wholesalers went on feasting on consumers woes. What should be done now? Mere market monitoring and raids on sellers places and fining them may not work wonders in respect of taming the wayward market, when syndicates of tycoons are at play. At last on June 09, 2016 meeting with businesspeople the government warned traders against manipulating commodity prices during the month of Ramadan, when the items mentioned above are hugely consumed. The Commerce Minister told the businessmen during the discussion on the market situation at the ministry We dont want you to incur losses but want to protect consumers interests at the same time. The minister said the government stresses discussions with businesses to keep prices under control rather than intervene in a market economy. Referring to the slapping of a huge fine on a sugar wholesaler in Chittagong on June 8, 2016, the minister said others trying to extract extra profits would face similar consequences. Hajji Mir Ahmed Traders of the port citys biggest wholesale market at Khatunganj was fined by Tk 2 million for selling sugar at Tk 58 a kilogram after buying at Tk 46 from refiners. The minister accused some businessmen of creating an artificial crisis in sugar. He said We all now know that wholesalers buy sugar at Tk 48. Strict actions will be taken against manipulators. He, however, claimed that prices of all commodities, except for chickpeas and sugar, were normal. The SRO does not go with free market economy it is certainly a market-intervention instrument in a capitalist system. If it can be used to jack up market prices, it can also be lifted when the action hits the common consumers. Apart from the consumption side, there is also fashion aspect of the month of Ramadan fasting and festivals. The Eid-ul-Fitre at the end of Ramadan is the biggest annual festival for the Muslims the vast majority people of the country. People of other faiths also try to get dressed in their best during such occasion as that is also time for holidaying. So, if not price control, there should be market monitoring and regulatory action so that traders cannot fleece the buyers amid the binge. Especially, the imported items need a watch over import price and marketing rates. Limited-income people have a strict limit to sparing money on fashion wears and articles. Even the bureaucrats who had fabulous pay rises also have limit to their spending capabilities if money doesnt flow in through byways. After all, most of the members of the business community need to keep in mind that worship is not confined to rituals. All round activities of human beings are included in it. As one worships in the mosques, eid-fields, in the field of Arafat likewise one has to worship in his way of justly performing duties in offices, businesses, courts, parliament, educational institutions, farms, mills-factories, war fields, agriculture in a word in all walks of human working life as per the direction of the supreme creator for obtaining His allegiance. Therefore, it is religiously as well as ethically binding on them not to coerce the common people by grabbing exorbitant profit from the fasting folks by taking advantage of the holy month of Ramadan. The businessmen, not by coercing the consumers, in addition to performing outward ceremonial worships, may earn Rahmat (mercy), Magferat (forgiveness) and Nazath (salvation) in this holly month of Ramadan if they honestly desire so. The writer is a retired Professor of Economics, BCS GeneralEducation Cadre